Fraud Briefs Archives - Page 20 of 23

24 Sep 2019

Fight Fraud Actively for Maximum Effect

When it comes to reducing fraud loss and duration, companies should fight fraud actively. Active detection methods (such as surprise audits or data monitoring) are far more effective than passive methods (such as confessions or notification by police). This was a major finding of the latest Association of Certified Fraud Examiners (ACFE) Report to the Nations: 2018 Global Study on Occupational Fraud and Abuse. Yet many companies fail to use active methods to their full potential. Active vs. passive detection The ACFE study found that frauds detected using passive methods tend to last longer and produce larger losses than those detected by such active methods as: IT controls, Data monitoring and analysis, Account reconciliation, Internal audit, Surprise audits, Management review, and Document examination. These active methods of detection...

09 Sep 2019

Your Phone May Be a Fraud Risk

Roger Rossmeisl, CPA

Fraud Briefs

As more people use mobile phones, more fraud perpetrators target these devices. According to Javelin Strategy & Research, between 2017 and 2018 the number of fraudulent mobile-phone accounts opened grew by 78%. Schemes in which thieves open a phone account in your name and use it to access your bank account, sign up for credit cards and gain access to personal information are only some of the recent fraud trends. Fraudsters have plenty of ways to defraud consumers through their phones. It's clear . . . you're phone may be a fraud risk. Your phone may be a fraud risk: Why they’re vulnerable One of the reasons mobile phones are so vulnerable is that phone security hasn’t kept pace with traditional computer security. Mobile devices rarely contain...

26 Aug 2019

Assess Fraud Risk Before Experiencing Losses

Roger Rossmeisl, CPA

Fraud Briefs

Assess Fraud Risk Before Experiencing Losses

If you’re like most business owners and executives, you may not actively search for fraud risks — until there’s an incident and you’re facing possible losses. Although publicly traded companies must conduct fraud risk assessments, privately held businesses don’t have the same requirements. Nevertheless, reviewing internal controls for gaps that might allow crooks to slip through is recommended for all companies. Assess fraud risk before experiencing losses: 4 major ways A comprehensive risk assessment might start in the areas where fraud is most likely to happen, such as accounts payable, purchasing and IT. But don’t stop there. If you close a door in only one department, those bent on fraud will find openings elsewhere. Look at your internal controls in the same way a dishonest employee would...

25 Aug 2019

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

The Greatest Corporate Espionage Risk

Roger Rossmeisl, CPA

Fraud Briefs

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

Fraud Guides Help Criminals Hack Your Data

Roger Rossmeisl, CPA

Fraud Briefs

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

Calculating Fraud Damages Isn’t That Simple

Roger Rossmeisl, CPA

Fraud Briefs

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

Using Data Analysis to Detect Fraud

Roger Rossmeisl, CPA

Fraud Briefs

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

Don’t Mistake Kickbacks for Gifts

Roger Rossmeisl, CPA

Fraud Briefs

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...

Fight Fraud Actively for Maximum Effect

Your Phone May Be a Fraud Risk

Assess Fraud Risk Before Experiencing Losses

Background Checks on Prospective Employees

The Greatest Corporate Espionage Risk

Fraud Guides Help Criminals Hack Your Data

Calculating Fraud Damages Isn’t That Simple

Using Data Analysis to Detect Fraud

Don’t Mistake Kickbacks for Gifts

ROGER ROSSMEISL, CPA

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