11 Dec 2020
0

Don’t Make Computer and Equipment Theft Easy

Roger Rossmeisl, CPA
Fraud Briefs
Dont Make Computer and Equipment Theft Easy

These days, many offices and other workspaces are nearly empty as employees work from home. This can make companies that don’t safeguard their computers, printers and other equipment vulnerable to theft from outsiders. Even during normal times, businesses often lose assets because crooked employees walk out with them. Here’s how to protect valuable property — no matter who’s eyeing it. Asserting ownership First, claim your business’s assets. This means adding security plates and indelible identity markings to machines. These additions can help you track stolen equipment, inhibit resale and discourage thieves from trying to steal in the first place. Security software can help you track stolen computers online. As soon as the thief connects to the Internet, the computer’s software contacts a security firm’s monitoring system, which traces...

27 Nov 2020
0

Controls are Ineffective When Managers Go Rogue

Roger Rossmeisl, CPA
Fraud Briefs
Controls are Ineffective When Managers Go Rogue

Management overrides of internal controls can make your company more vulnerable to fraud. This is true even when managers have innocent intentions — for example, they don’t feel they have time to follow proper accounts payable procedures because a vendor is requesting immediate payment. Your company is at even higher risk of fraud losses . . . controls are ineffective . . . if a senior manager intentionally ignores the rules to manipulate financial statements. Warning signs Management overrides of financial controls can be difficult to detect. However, there are several warning signs that a manager isn’t fully adhering to the policies and procedures your organization has adopted. For instance, a manager may fail to call attention to business risks or dispute an auditor’s findings regarding his...

25 Nov 2020
0

Ghost Employees and Other Payroll Scams

Roger Rossmeisl, CPA
Fraud Briefs
Ghost Employees and Other Payroll Scams

Ghost employees and other payroll scams are trouble for employers. They may be just as fictional as the paranormal activities in your favorite scary book or movie, but if you have ghost employees on your payroll, you have fraud. And if you have fraud, you have potentially significant financial losses. Anatomy of a scheme Ghost employee schemes usually are perpetrated by employees who have easy access to payroll records. If your company’s internal controls are loose enough to be exploited, a greedy or disgruntled staffer could invent an employee, put this “person” on the payroll and direct deposit paychecks to a bank account in the ghost’s name. It may seem like it would be easier to hide ghost employees in large companies. In fact, small businesses, where a...

07 Nov 2020
0

21st Century Forensic Accounting

Roger Rossmeisl, CPA
Fraud Briefs
21st Century Forensic Accounting

Forensic accountants are engaged for a wide variety of assignments, among them investigating fraud, auditing internal controls and quantifying damages associated with legal disputes. All of these require attention to detail and a diverse set of skills including mathematical, technological, legal and investigative. But the accounting landscape and client needs are constantly changing. Here’s how the profession has adapted and digitized 21st century forensic accounting, and how it's applying the latest technological solutions. Embracing the digital revolution Technology has radically changed how forensic accountants do their jobs. Businesses used to be awash in paper. Today, most companies run on a digital backbone and discourage employees from printing to save money and reduce environmental damage. Consequently, forensic accountants must be able to gather, analyze and make sense of...

07 Nov 2020
0

Is Your Business Inadvertently Paying a Shell Company?

Roger Rossmeisl, CPA
Fraud Briefs
Is Your Business Paying a Shell Company

Not all shell companies are dishonest. Despite their often-sinister reputation, these paper-only companies may be used legitimately to hold another business’s assets. Or they may be the “empty container” left after a company downsizes or is acquired. That said, some fraud perpetrators use shell companies to embezzle funds, evade taxes, dodge debts and commit other illegal acts. For many businesses, the biggest threat posed by illegitimate shell companies is that unscrupulous employees will use them to perpetrate billing fraud. Here’s how to spot a shell scheme in your midst. Under cover Employee-perpetrated shell company schemes take one of two forms. In the first, an employee sets up a shell company to send out — and collect on — fictitious bills. Perpetrators don’t have to send the bills for...

28 Oct 2020
0

5 Medical Practice Fraud Controls

Roger Rossmeisl, CPA
Fraud Briefs
5 Medical Practice Fraud Controls

The COVID-19 pandemic has put enormous pressure on medical practices and healthcare workers. The last thing they need right now is to worry about financial losses and other negative repercussions of occupational fraud. So that physicians and their employees can focus on patient care, they should take a little time now to ensure strong internal controls are in place. Elements of embezzlement According to the Association of Certified Fraud Examiners, embezzlement is the most common form of occupational fraud in medical practices. For example, crooked employees might: Steal receipts or cash on hand, Alter or forge checks, Submit fictitious invoices, Pay personal expenses with practice funds, or Cheat on their expense reimbursement requests. Unfortunately, the complexity of medical practice paperwork discourages many physicians from involvement in the administrative...

17 Oct 2020
0

Synthetic Identity Theft is Growing Fast

Roger Rossmeisl, CPA
Fraud Briefs
Synthetic Identity Theft is Growing Fast

Management consulting company McKinsey reports that synthetic identity theft is growing fast.  In fact, it's the fastest growing financial crime in the United States. And a LexisNexis Risk Solutions study has found that 20% of ID theft losses by banks can be attributed to synthetic versions of the scheme. If you’re unfamiliar with synthetic ID theft, you should know that it’s not — as its name might imply — a weaker, less “real” form of fraud. In fact, it tends to be much harder to prevent and detect. That’s because all a perpetrator needs to create an identity for criminal purposes is a Social Security number (SSN). Frankenstein monsters Traditionally, identity theft occurs when a thief gets hold of someone’s personal information and uses it to assume his...

17 Oct 2020
0

Using Lifestyle Analysis to Find Hidden Income and Assets

Roger Rossmeisl, CPA
Fraud Briefs
Using Lifestyle Analysis to Find Hidden Income and Assets

Forensic accountants have many tools to help them find evidence of hidden assets or fraud. But one of the most effective, particularly in divorce matters or legal disputes with former business partners, is using lifestyle analysis to find hidden income and assets. This method involves developing a financial profile of a subject and then examining mismatches between the person’s known resources and lifestyle. Financial profiling Forensic accountants develop a financial profile of a subject by examining: Bank deposits. The expert reconstructs the subject’s income by analyzing bank deposits, canceled checks and currency transactions, as well as accounts for cash payments from undeposited receipts and non-income cash sources, such as gifts and insurance proceeds. Expenditures. Here, the expert analyzes the subject’s personal income sources and uses of cash during a...

11 Oct 2020
0

Getting the Goods on Inventory Theft

Roger Rossmeisl, CPA
Fraud Briefs
Getting the Goods on Inventory Theft

Maybe the numbers didn’t add up during your company’s recent inventory count. You know that most inventory discrepancies are the result of honest mistakes, such as when employees return items to the wrong shelves or customer returns are flubbed. It’s even possible that you’ve made a mistake and need to perform a recount. But if you suspect something more sinister — such as employee theft — don’t hesitate to call in reinforcements. A forensic accountant can assist in getting the goods on inventory theft.  Where the clues are  When fraud experts can’t find “innocent” explanations for missing inventory, they look at the business’s culture and environment. Poor controls over purchasing, receiving and cash disbursement puts companies at higher risk of employee theft. And if one person performs...

07 Oct 2020
0

Factoring Fraud Risk into a Business Valuation

Roger Rossmeisl, CPA
Fraud Briefs
Factoring Fraud Risk into a Business Valuation

Business value is a function of risk and return. This is why, when appraising companies, valuation experts are always factoring fraud risk into a business valuation. Although valuations typically aren’t designed to unearth dishonest behavior, experts may expand the scope of their engagement if they spot something suspicious — particularly if they believe financial statements are inaccurate. Possible risks  A valuator’s fraud risk assessment starts with the subject company’s internal controls. When interviewing management, experts ask about the business’s policies and procedures to protect assets, improve operating efficiency and ensure reliable financial statements. For example, they look for risk-reducing controls such as: Physical and digital controls (for example, locks, passwords, cameras and security systems),  Fraud training programs,  Job descriptions that call for segregation of duties and job...

ROGER ROSSMEISL, CPA

Kho & Patel CPAs
160 E. Arrow Highway
San Dimas, CA 91773

(714) 325-0442
roger@khopatel.com

RECENT BLOG ENTRIES

JOIN OUR E-NEWS

LET’S GET SOCIAL

Twitter
Facebook
LinkedIn
logo ©2019 Roger Rossmeisl | Effusion