One of the things that make family businesses such appealing places to work is trust. Trust also is one of the things that make family businesses vulnerable to fraud. It only takes one lone wolf to damage or destroy an enterprise you and your family...
For many entrepreneurs, obtaining a ‘doing business as’ (DBA) certificate enables them to open a small business. However, DBAs also can be used to open shell companies. These businesses, which have no assets of their own, may be legitimate. For example, when they are used...
If you have ever considered paying employees in cash under the table, resist the temptation. Not only do you and your workers risk penalties, but the practice may do significant financial damage to your business and could even result in criminal prosecution. Justifying the practice Employers may...
If someone steals your credit or debit card (or just your account number) and uses it to make purchases, will your card company hold you liable? The answer may depend on the type of card, whether the physical card is still in your possession, and...
Uncovering and documenting facts in a fraud case is just the precursor to what may be the most important part of an investigation: producing a report that will stand up in court. Here is what a fraud investigator will do to ensure that their report...
When thinking about the ways financial experts can uncover fraud, what usually comes to mind are data analysis and other forensic accounting techniques. Qualified experts, however, also keep everyday managerial accounting practices in their fraud toolkit. Variance analysis After an organization finalizes its budget, management may perform...
Matt was a trusted long-term employee who, unfortunately, was deeply in debt. Recognizing that his company’s payroll controls were loose enough to be exploited, he put a ‘ghost’ employee, “Scott,” on the payroll, opened a bank account in Scott’s name, and arranged for direct deposit...
A company’s solvency can come into play if it paid another creditor when it had an obligation to pay you first. If such circumstances lead to litigation, you should consider hiring a solvency expert to determine whether the company actually could meet its long-term interest...
Workers’ compensation fraud costs American employers millions of dollars a year. The most publicized form of the fraud involves bogus claims by workers, but they are not always the perpetrators. Sometimes, health care providers and insurance carriers try to pull workers’ compensation scams, too. Employee-perpetrated scams The...
If only employees prone to fraud had the letter ‘F’ stamped on their forehead? You could monitor them closely and make sure they never had access to the accounting books, but potential thieves are never that obvious. It starts with pressure In many cases, employees who commit...