Creating an Effective Anti-Fraud Environment
presented by Douglas Sosnowski
Fraud and abuse costs businesses owners more than $650 billion annually, the most costly abuses occurring in companies with less than 100 employees. This presentation will explore the different types of fraud and common schemes utilized by embezzlers. We will identify the warning signs and provide recommendations for creating an effective anti-fraud environment. You will also learn proven methods used to detect fraud and deter other employees from engaging in criminal activities. Click here for handouts or contact Doug Sosnowski for more information.
Brisbane Consulting Group’s fraud experts are Certified in Financial Forensics (CFF) and have specialized training in investigative accounting and litigation support. Companies of all sizes are victims of theft every year. That is why you must always be vigilant and establish safeguards to protect your business. However, even the most well designed system of internal controls can fail resulting in financial losses. When this occurs, you require the services of Brisbane Consulting Group. Our experience includes the discovery of fraud and expert testimony in civil and commercial litigation. Forensic engagements conducted by our firm include:
- Business Interruption
- Breach of Contract
- Solvency Analysis
- Lifestyle Analysis
- IRS Defense
The need for forensic accounting services can arise from mismanagement or fraud. When a company becomes aware of financial irregularities, they require the services of a forensic accountant to determine if losses sustained by the business were due to lack of competency or illegal acts. Often a company’s independent auditor may identify internal control deficiencies and accounting errors. However, their objective is to provide an opinion on the financial statements taken as a whole within predetermined levels of materiality. The job of a forensic accountant is to uncover hidden assets, unreported income or overstated expenses and other misstatements, regardless of their materiality.
As CFFs trained and experienced in investigative accounting, Brisbane Consulting Group has the skills to quantify financial losses and document the accounting environment that created the opportunity for irregular activities.
When the financial losses are the result of fraud, our forensic accountants will identify the parties involved in the scheme and preserve the evidence necessary for prosecution. Our expert witnesses will work with local law enforcement and legal counsel to obtain restitution, and if necessary, testify in court.
Forensic clients of Brisbane Consulting Group include governmental agencies, non-profit organizations, privately-held companies, publicly-traded companies, and individuals. Following is a sample of situations that require the services of a forensic accountant:
1. A contract for the acquisition of a business included an earn-out provision based on the future profitability of the company. Although the company had maintained consistent profit margins for many years, the post-acquisition financial results indicated declining profitability which reduced the amount of the earn-out. In this case, Brisbane’s forensic team was hired to review the company’s sales and determine if profitability was intentionally understated.
2. One of the business partners in a privately-held company worked in the field while the other partner handled administration and finances. After a period of growth, the company’s earnings began to decline, resulting in lower compensation paid to the owners. The partner working in the field retained the services of Brisbane’s forensic team to verify that compensation was fairly distributed between the two partners.
3. Upon the death of a long-time Finance Director, a non-profit agency discovered unusual journal entries posted to various low-risk accounts. Since these accounts were deemed low-risk, the agency’s independent auditors performed no analysis on these accounts in the course of their annual audit of financial statements. Brisbane’s forensic accountants were hired to analyze the source of the unusual journal entries and determine if the former employee was embezzling from the agency.
4. The owner of a successful business filed a legal action to divorce his wife. During discovery, the lawyers observed that the profitability of the business declined substantially in the three years prior to the commencement of the divorce. Brisbane’s forensic accountants were hired to review the history of the business and prepare a lifestyle analysis. The objective of this engagement was to determine the true profitability of the business and the actual income of the business owner.
In each of these situations, our team of forensic accountants was able to quantify the financial loss and document the methods used to mislead the other stakeholders. We are confident in our ability to help companies in all industries to investigate fraud or financial mismanagement.
For more information on forensic accounting services, contact Douglas P. Sosnowski, CPA/ABV, ASA, CVA, CFF