FRAUD EXAMINATION Planning and Preparation Our fraud examiners will be armed with case models of similar companies and aware of the roles and responsibilities of all involved. We will work closely with legal professionals and clients to ensure that the investigation is carefully planned and includes all relevant factors. Our team will investigate the appropriate paper trails for particular transactions, and will carefully plan the order of the necessary interviews to ensure that inconsistencies and lies can be easily spotted. Research Techniques Deborah Bailey-Browne CPA & Associates fraud examiners review numerous company documents to isolate indicators of fraud or to trace the history of a particular fraudulent activity. We utilize traditional accounting techniques such as ratio analysis, and the asset or expenditure method to pinpoint fraudulent activity within specific financial documents. Sometimes our specialists use outside information such as public records, competitor or industry information, and commercial databases, to obtain relevant information about a case. Interviewing Personnel Non threatening interview techniques are used to obtain information from company employees. Our team is prepared to deal with adverse or reluctant witnesses, and we are trained to detect deception from the people interviewed. Case Preparation and Testimony Our team must make sure that all case-supporting information is carefully documented. We are skilled in preventing potential problems in the exhibits. We also know the rules of evidence, including the specific rules of admissibility and requirements for direct, circumstantial, and documentary evidence. Deborah Bailey-Browne CPA & Associates fraud examiners can provide depositions and expert testimony, which might be required for trial. Business Areas Susceptible to Fraud Deborah Bailey-Browne CPA & Associates fraud examination team assists business owners in identifying the areas of their business that could be susceptible to criminal behavior. Our professionals can work with businesses and advisors to ensure that sufficient internal controls are in place to protect the following areas from fraud. Accounts Receivable Employees in accounts receivable can commit fraud against the company in a variety of ways. Inventory Employees have been known to steal inventory or the proceeds from scrap sales. They can also charge the costs of other embezzlement activity to inventory, where it is not readily perceptible. Purchasing Payments to outside vendors or contractors could be contributing to an embezzling employee’s personal finances. For example, an employee may create fraudulent invoices for intangible services or products, participate in over billing schemes, or set up fictitious contractors or suppliers to be paid by the company. In these cases, the payments may actually be going to the employee or other involved parties. Payroll and Personal Expenses Employees can also create fictitious payroll tax returns to substantiate claims of ghost personnel. Another area that can be subject to fraud is personal expenses. Businesses should have control systems in place that can verify the legitimacy of claimed business expenses. Cash A company’s available cash can be an easy target for employee fraud. Businesses should have a system of checks and balances to ensure that available financial date accurately reflects the company’s cash situation. A fraud examiner can help a company understand its cash-flow situation in terms of overall business operations, and can identify inconsistent industry or business practices within an organization. Management Level Fraud Schemes Shareholders and other external stakeholders can also be victims of fraud caused by a company’s management. Financial statements can be presented to report misleading financial information, fixed assets can be valued or classified inaccurately, revenue can be recognized prematurely or improperly, or expenses can be shifted to present misleading financial information. Preventing, Investigating and Measuring Business Fraud Fraud can pose a very serious threat to the bottom line of a business. It can be perpetrated by trusted employees or can be committed by a co-owner or top executive. Since evidence of business fraud is not easily discernible, businesses may require the assistance of professionals with special skills to investigate information below the surface and to pinpoint the causes of the fraud, as well as to quantify the amount of money involved. Whether the investigation takes place as a means to prevent potential crimes or after a crime has been discovered, it is important to understand the internal control factors that can prevent such crimes from occurring. Deborah Bailey-Browne CPA & Associates has fraud investigation experience that is supported by analytically and technically skilled accountants. Deborah Bailey-Browne CPA & Associates specialists help clients to define whether or not crimes have been committed. Our team has helped business clients, as well as legal practitioners, in a variety of fraud-related cases ranging from general internal control reviews to complex cases involving hundreds of thousands of dollars of embezzled funds. Fraud examiners are qualified to provide this type of business advice. We can resolve a wide range of allegations regarding fraud and white-collar crime. They take statements, assemble evidence, write reports, testify to findings, and assist in the prevention and detection of fraud. Contact Deborah Bailey-Browne CPA & Associates to arrange a fraud assessment and/or internal central review for your business.