By far the most common way that executives manipulate financial statements is through the overstatement of revenue. The reason is simple: It’s the easiest way to improve the appearance of the company’s financial condition. Revenue can be inflated by doing things such as: Booking fictitious sales Holding the books open …
Cost-saving measures are always attractive to businesses. If a company with annual revenue of $10 million could eliminate a $500,000 expense, would management be interested? Internal fraud prevention could be the key to saving money in precisely this way. Experts estimate that companies lose about 5% of their revenue each …
There are a number of common signs that we may see when someone is engaged in financial fraud within a company. Tracy talks about the behavioral red flags for fraud in this video, which are also summarized below:
How do you begin searching for fraud in a company? Sometimes I get called in when a company finds an employee stealing. They have found one instance of theft and they want to have the rest of the company looked at, but they don’t know where to begin. What should …
In a corporate fraud investigation, the most abundant source of information about the fraud will likely come from internal records of the company. Remember, of course, that the internal records will be not only be paper records, but will be digital as well. In fact, the volume of digital records …
What kinds of companies are more prone to fraud? In my business, we talk a lot about the red flags of fraud. There are two different types of red flags: the kind that suggest that a fraud is currently in progress, and the kind that puts a company at greater …
After an internal fraud is discovered and fully investigated, a company and its employees must move forward. That might seem like a simple thing to do, but it is not always quite that easy. The financial blow of an internal fraud can be devastating. Employees have long-term memories that may …
It sometimes seems like it’s easy to commit fraud at work. Why is that so? One of the main reasons is that employers must put trust in their employees and give them access to data and assets. It’s also important to remember that employers give responsibility to people who are …
Numerous signs can point to the possibility of fraud. Literally hundreds of different types of fraud schemes exist, so the number of possible red flags of fraud is huge. Today we’ll talk about one area where you may see some red flags: irregularities in the accounting records and procedures. Irregularities …
The average business loses approximately 5% of revenues to employee fraud. The employees are running off with money, fixed assets, and business opportunities. They are taking kickbacks from suppliers who overcharge for their products and services, and pushing contracts toward friends and relatives. Executives are manipulating financial statements to increase …
