30 May 2022
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How to Qualify for – and Keep – Cyber Insurance Coverage

Roger Rossmeisl, CPA
Fraud Briefs
How to Qualify for - and keep - Cyber Insurance Coverage

These days, it’s common for businesses to purchase cyber insurance to help mitigate financial losses from network breaches. According to the U.S. Government Accountability Office, the proportion of businesses adding cyber coverage increased from 26% in 2016 to 47% in 2020. But in the event of a loss, processing such claims can be expensive, and insurers are becoming more selective about the companies they agree to insure and for how much. In response to mounting losses from cybercrime, insurers are also raising premiums. If your company wants to qualify for cyber insurance at an affordable price, we recommend the following five steps: 1. Spend time with the application.  Insurers ask applicants to complete a security questionnaire to help them understand the risks facing the companies. Answering the...

23 May 2022
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Keep Cybercriminals from Stealing Your Business’s Brand

Roger Rossmeisl, CPA
Fraud Briefs
Keep Cybercriminals from Stealing Your Businesss Brand

When criminals steal an individual’s identity, the victim can take steps to minimize potential damage by, for example, notifying credit agencies and freezing bank accounts. But what happens if a cybercrook steals a company’s identity and uses it to engage in fraud? This situation can be more complicated — and expensive — to resolve. Fraudsters who use your business’s digital assets for their benefit are known as brandjackers. Brandjacking schemes may involve copying websites, social media accounts, logos and email domains to lure your customers, suppliers and other stakeholders and defraud them. But you can fight back. Consider taking these seven steps: 1. Monitor social media chatter.  Maintaining control of your brand and its digital assets is critical to detecting brandjacking. A big part of this is monitoring...

16 May 2022
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5 Ways to Foil a “Fraud Department” Scam

Roger Rossmeisl, CPA
Fraud Briefs
5 Ways to Foil a Fraud Department Scam

When banks detect suspicious activity in a customer’s account, they often call account holders to discuss the transactions. Time is of the essence when it comes to preventing fraud, especially in the case of wire and automated clearing house transactions. In most cases, if a caller claims to work for the fraud department of your or your business’s bank, the call is likely legitimate. However, in a currently active scam, criminals pretend to be bank fraud investigators and try to extract account information from consumers or employees. Here’s how to identify criminals and prevent account breaches: Don’t trust caller ID. A fraudster might “spoof” or fake a phone number, which means your caller ID could display a bank’s fraud department name and number. Even if caller...

08 May 2022
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How Cash Flow Statements Help Experts Find Fraud

Roger Rossmeisl, CPA
Fraud Briefs
How Cash Flow Statements Help Experts Find Fraud

Many fraud investigations focus on financial statements. Because cash is the most commonly stolen business asset, fraud experts regularly scrutinize statements of cash flow for signs of misappropriation and fraudulent disbursements. If you suspect occupational fraud and request an investigation, here’s what the experts might find. Unusual changes Your statement of cash flows shows how cash changed during the year. Forensic accountants generally look for amounts that seem unreasonable and for increases or decreases in accounts that seem to contradict trends in operating cash flows or other financial information. The statement of cash flows is typically broken down into three categories: Cash from operations, Cash from investing activities, and Cash from financing activities.  Fraud experts often apply ratio analysis to detect unusual changes that might indicate fraud — for...

01 May 2022
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What to Do When Your Identity is Used to File a Fraudulent Tax Return

Roger Rossmeisl, CPA
Fraud Briefs, Individual Tax Briefs
What to do When Your Identity is Used to File a Fraudulent Tax Return

In Fact Sheet 2022-25, the IRS has provided information about how taxpayers should handle non-tax and tax-related identity theft. When a taxpayer believes their personal information is being used to file fraudulent tax returns, they should submit a Form 14039, Identity Theft Affidavit, to the IRS. But in most cases, taxpayers do not need to complete this form. Only victims of tax-related identity theft should submit the Form 14039, and only if they haven't received certain letters from the IRS. All taxpayers can request an Identity Protection Personal Identification Number (IP PIN) using the Get An Identity Protection PIN (IP PIN) tool on IRS.gov to protect themselves from becoming a victim of tax-related identity theft. What is tax-related identity theft? Tax-related identity theft occurs when someone uses a taxpayer's...

21 Apr 2022
0

Preventing and Detecting Fraud in the C-Suite

Roger Rossmeisl, CPA
Fraud Briefs
Preventing and Detecting Fraud in the C-Suite

Executives often receive lucrative compensation packages. But for some, it isn’t enough and they engage in illegal activities to line their own pockets. The Association of Certified Fraud Examiners (ACFE) has found that owners and executives commit 20% of occupational fraud. However, they’re responsible for the largest median loss of $600,000. (In comparison, rank-and-file employees who steal are responsible for a median loss of just $60,000.) Most organizations can’t afford such losses. Then there’s the risk of bad publicity, potential for lawsuits and demoralized employees and other stakeholders. To keep executive fraud from fleecing your company, you need to take aggressive measures to prevent it. And, if you discover fraud has already occurred, you must act quickly to contain it and hold the perpetrator responsible. Fraud triangle Some...

28 Mar 2022
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Don’t Lose Your Business’s IT Assets

Roger Rossmeisl, CPA
Fraud Briefs
Dont Lose Your Businessess IT Assets

Keeping track of every IT asset — particularly as remote work has become common — is essential if your company wants to limit financial losses and fraud risk. According to some estimates, most remote employees use at least two employer-assigned devices, and a smaller percentage use three or more. In general, the more devices in use, the greater the potential for loss or theft. But you can keep tabs on hardware such as desktops, laptops, mobile phones, tablets and the software you’ve purchased or developed to operate them, with IT asset tracking. Following is a three-step guide. (1) List Your Assets The first step involves developing a list of the IT assets you need to track. Although third-party software can help simplify this task (especially if the software...

23 Feb 2022
0

Protecting your Company from Cryptocurrency Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Protecting your Company from Cryptocurrency Fraud

According to blockchain data company Chainalysis, cryptocurrency transactions associated with illegal activity topped $14 billion in 2021. That’s almost double 2020 numbers — and the momentum shows no signs of slowing. In addition to outright cryptocurrency theft, these crimes include investment fraud and ransomware scams that affect businesses. Yet cryptocurrency offers several advantages to entrepreneurs and established companies, including instant, low-fee transactions and access to new sources of capital. If you use cryptocurrency — or want to — understanding the risks can help prevent financial losses. The basics Cryptocurrencies use blockchain technology, a shared electronic ledger that records and stores transactions in the nodes of a computer network. Most cryptocurrencies use public blockchains, making it possible for anyone to see a digital wallet’s balance and transactions, including criminals....

19 Jan 2022
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To Prove Fraud, You Need to Preserve Evidence

Roger Rossmeisl, CPA
Fraud Briefs
To prove fraud you need to preserve evidence

Prevention is the heart of any fraud mitigation program. But sometimes even solid internal controls fail (because, for example, a manager overrides controls) and occupational fraud occurs. If you suspect an employee of stealing, you’ll want to do everything you can to ensure the perpetrator is caught. In most cases, you should hand a fraud investigation over to your attorney and a forensic accounting expert. But before these professionals arrive on the scene, you may need to collect and secure evidence. Paper evidence is generally easy Handling paper documents is relatively easy as long as you approach the task with care. Place any hard documents related to the possible fraud in a secure location. The fewer people who touch it, the better. Don’t make notes on paper documents....

05 Jan 2022
0

Salespeople and Commission Fraud

Roger Rossmeisl, CPA
Fraud Briefs
Salespeople and Commission Fraud

Many employees — from retail workers to sales staffers involved in complex business-to-business transactions — receive part of their compensation from sales-related commissions. To attract and retain top talent, some companies even allow employees to earn unlimited commissions. Unfortunately, some commission-compensated employees may be tempted to abuse this system by falsifying sales or rates. Fraud methods vary depending on an unethical salesperson’s employer and role. But companies need to be aware of the possibility of commission fraud and take steps to prevent it. 3 forms Generally, commission fraud takes one of three forms: Invention of sales. A retail employee enters a fake purchase at the point of sale (POS) to generate a commission. Or an employee involved in selling business services creates a fraudulent sales contract. Overstatement of sales....

ROGER ROSSMEISL, CPA

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

(714) 325-0442
roger@khopatel.com

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