25 Aug 2019
0

Background Checks on Prospective Employees

Roger Rossmeisl, CPA
Fraud Briefs
Background Checks on Prospective Employees

Background checks don’t inoculate companies against occupational fraud and other criminal acts by employees. After all, many thieves have never been caught and, therefore, have no criminal background.  But conducting background checks on prospective employees remains critical. If you’re hiring an accounting staffer, for example, you want to know if that person is deeply in debt and has an incentive to cook the books. If you’ll be issuing a company car, you probably don’t want to hire someone with a slew of moving violations. Basic information At a minimum, ask former employers to confirm dates of employment, job titles and other resumé information, and then ask about the applicant’s work habits and reliability. Many employers are unwilling to divulge more than factual information because they fear lawsuits from...

19 Aug 2019
0

The Greatest Corporate Espionage Risk

Roger Rossmeisl, CPA
Fraud Briefs
The Greatest Corporate Espionage Risk

It’s a federal crime to steal trade secrets.  However, that doesn’t stop thieves from successfully making off with billions of dollars in intellectual property (IP) annually. Companies may work hard to prevent outsiders from infiltrating their organizations, yet the greater danger is generally internal. Here’s how to identify your business’s corporate espionage vulnerabilities and prevent employees from taking advantage of them. The greatest corporate espionage risk: bad and good intentions The greatest corporate espionage risk is internal.  Employees with access to trade secrets may take that information with them when they leave your company.  Or they can pad their paychecks by selling information while still employed. But not all employees who share IP have bad intentions. In some cases, they may not realize they’re passing it on....

07 Aug 2019
0

Fraud Guides Help Criminals Hack Your Data

Roger Rossmeisl, CPA
Fraud Briefs
Fraud Guides

Fraud experts have long known that “dark web” sites provide information, support and illicit goods to hackers and other criminals. But security company Terbium Labs recently published a report analyzing a treasure trove of fraud guides for sale on shady sites. Fraud guides help criminals hack your data.  These “educational” publications provide crooks with detailed instructions on exploiting security weaknesses to hack networks, obtain financial information and steal identities. Effective tips While fraud guides help criminals, Terbium found that most of the guides it downloaded were relatively useless.  Still, there were plenty that provided effective tips on compromising networks and disrupting antifraud procedures. The guides cover everything from account takeovers to phishing to counterfeit documents to stolen credit cards. Often, they discuss specific companies. For example, a...

05 Aug 2019
0

Calculating Fraud Damages Isn’t That Simple

Roger Rossmeisl, CPA
Fraud Briefs
Calculating Fraud Isn't That Simple

When businesses are defrauded, courts can — and in some states must — order restitution. But calculating fraud damages isn't that simple.  It isn’t always easy for judges to decide how much a company has lost. That’s where fraud experts can help. Calculating fraud damages: Benefit of the bargain method At first glance, calculating restitution may seem easy: Someone steals $25,000, so he or she should repay that amount, perhaps with interest. But what about the profits the business lost because of the fraud? The answer varies by state and even by case. Experts typically use either the “benefit of the bargain” or “out of pocket” rule to determine damages. The appropriate method depends to some degree on the location and nature of the fraud. But in most...

29 Jul 2019
0

Using Data Analysis to Detect Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Using Data Analysis to Detect Fraud

Using data analysis to detect fraud is changing the way many businesses operate. It’s also changing how forensic accountants do their jobs, providing fraud experts with the means to mine massive mounds of data like never before. USING DATA ANALYSIS TO DETECT FRAUD: 3 TECHNIQUES These analytical techniques are among the most efficient and effective at detecting occupational fraud: (1) Association analysis This method can help identify suspicious relationships by quantifying the odds of a combination of data points occurring together. In other words, it calculates the likelihood that, if one data point occurs, another will, too. If the combination occurs at an atypical rate, a red flag goes up. For example, association analysis might find that a certain supervisor tends to be on duty when inventory theft occurs. (2)...

24 Jul 2019
0

Don’t Mistake Kickbacks for Gifts

Roger Rossmeisl, CPA
Fraud Briefs
Dont Mistake Kickbacks for Gifts

Kickbacks return a portion of the money exchanged in a business transaction as compensation for favorable treatment. They’re illegal in the United States and many other countries. Don't mistake kickbacks for gifts.  Because kickbacks are often disguised as gifts, travel and entertainment, they can be hard to identify. Don't mistake kickbacks for gifts: intention of the gift-giver Gifts, gratuities or courtesies of modest value associated with ordinary business practices are usually acceptable. The key consideration is the intention of the giver. Your employees shouldn’t accept any gift offered with the intent to improperly influence business decisions — or that would give the impression of compromising the employee’s ability to act in the best interests of the company. The same integrity test should be applied in deciding whether to...

28 Jun 2019
0

Social Security Phone Scams

Roger Rossmeisl, CPA
Fraud Briefs
Social Security Phone Scams

Despite the National Do Not Call registry and features such as caller ID, phone fraud is thriving in the mobile phone era. Using spoofed numbers — which appear to be connected to legitimate government offices and businesses or that resemble your own number — fraud perpetrators say anything and everything to try to steal your money. Recently, scammers have posed as Social Security officials to steal from unsuspecting consumers. Since January 2018, the Federal Trade Commission has received more than 63,000 reports about this scam. Only 3% of reporting call recipients lost money, but the losses total $16.6 million. Social Security phone scams: anatomy of a crime Here’s how the Social Security scheme works: Criminals call from spoofed phone numbers and tell consumers that their Social Security number has been...

27 Jun 2019
0

Employee Conflicts of Interest

Roger Rossmeisl, CPA
Fraud Briefs
Employee Conflicts of Interest

One of the governing principles of the employee/employer relationship is that employees have a fiduciary duty to act in their employer’s interests. Undisclosed employee conflicts of interest can be a serious breach of this duty. In fact, when employees aren't on your side, companies often suffer financial consequences. Employee conflicts of interest: ignorance isn’t bliss Here’s a fictional example of a common conflict of interest: Matt is the manager of a manufacturing company’s purchasing department. He’s also part owner of a business that sells supplies to the manufacturer — a fact Matt hasn’t disclosed to his employer. And, in fact, Matt has personally profited from the business’s lucrative long-term contract with his employer. What makes this scenario a conflict of interest isn’t so much that Matt has profited...

27 Jun 2019
0

Construction Company Anti-Fraud Checklist

Roger Rossmeisl, CPA
Fraud Briefs
Construction Company Anti-Fraud Checklist

According to the Association of Certified Fraud Examiners’ Report to the Nations: 2018 Global Study on Occupational Fraud and Abuse, organizations victimized by fraud lose a median $130,000. But construction companies, in particular, are even harder hit, with a median loss of $227,000. What can you do to protect your construction business? Adopt this construction company anti-fraud checklist. Construction Company Anti-Fraud Checklist: Ways to Tighten Controls An effective strategy for minimizing fraud is to tighten your internal controls. Make sure the following are part of your policies and procedures: Surprise audits and jobsite visits. These visits can not only help detect fraud, but also send a strong message that combating fraud is a priority — which is a powerful deterrent. Segregation of duties. Avoid situations in which one person...

19 Jun 2019
0

How to Spot Influencer Fraud

Roger Rossmeisl, CPA
Fraud Briefs
How to Spott Influencer Fraud

To increase brand awareness and influence consumer behavior, businesses of all sizes spend vast amounts on social media marketing. Social media “influencers” can help companies reach and engage customers. But not all influencers operate above board. Here’s how to spot influencer fraud.  And in so doing, avoid hiring or associating with a dishonest influencer. How to spot influencer fraud: The more, the better There’s no commonly accepted definition of how many followers an influencer must have to claim such status. But in general, the more, the better. After all, clients want access to as many eyes as possible. Knowing how important followers, likes and shares are, some influencers find it hard to resist the temptation to inflate their numbers. In general, they can command higher fees and attract...

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