Posts Tagged ‘anti-fraud controls’

Summer May Be Over But Top Blog Posts Are Always In Season

Friday, September 2nd, 2016

I don’t know about you, but September seemed to come out of nowhere! But fear not. Even though summer is officially over, we still have a lot to celebrate – like all those great blog posts we featured on Dear Drebit last month?! So, before we officially make the leap into fall, join me as I take a look back at some of the top posts business owners were reading in August.

  1. Get Ready, Get Set, Get Shopping! Were you one of the many shoppers flooding stores the first weekend in August in search of some great back-to-school bargains? If so, then you were able to take advantage of this year’s Sales Tax Holiday. Missed it? That is ok, read on to learn more about it and how you can take advantage of these savings next year.
  2. How To React To A Data Breach It was 2013 when a medium-sized library in Ohio found itself in the midst of a data breach that would later serve as a powerful case study warning against the very real threat of electronic fraud. While originally developed by the Ohio Auditor of State’s office as a tool for government entities throughout the state, Cash Management 240: Financial Fraud – A Case Study, has found usefulness beyond just the government sphere. Read more about it now!
  3. Did Fraudsters Counterfeit Your Organization’s Checks?The internet can be a valuable tool for so many honest, well-meaning people. Unfortunately, it can also be a playground for fraudsters. Keep reading to find out how fraudsters are counterfeiting checks.
  4. How Can You Track Use Tax in QuickBooks?Do you filed for use tax amnesty with QuickBooks? How are you going to track it daily going forward? The answer is as simple as 1-2-3.
  5. Could An FSA Bring Value To Your Business’s Benefit Plan? Does your company’s benefit package feature access to a Flexible Spending Account? Have you considered adding one in the past but still have questions? As health costs continue to rise, we continue to learn more and more about how this pre-tax health benefit can help level the playing field for employees. But in order to get maximum benefit from this incentive, your team needs to know what it’s capable of doing. Read on to learn more.

Did we leave you wanting more? Great! We love to hear from you about what information or updates you are looking forward to seeing this month. Just reach out to us with your question or topic and one of our accounting and business consulting experts may pick it up for a future post!

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Would You Know If Someone Was Stealing From Your Business?

Friday, May 20th, 2016
Employee Fraud- Ohio CPA Firm

According to the 2016 Report to the Nation on Occupational Fraud & Abuse by the Association of Certified Fraud Examiners (ACFE), the typical organization loses 5 percent of its annual revenue to fraud. What are you doing to prevent fraud from occurring in your organization?

A 20-year employee at a city school charged with managing adult education programs was known as a hard worker who had secured her colleagues’ respect. But when external auditors came into the district to review the school’s financial records, it didn’t take long to realize that something just wasn’t adding up. Questions began to circulate and people starting comparing notes. It wasn’t until her co-workers started questioning how she could afford the costly gifts during the holidays and lavish purchases made to redecorate her home that all the pieces began to fit together. After all, that type of money was certainly not in line with her position’s established pay scale.

Read Also: Are Your Employees Skimming From The Top?

Warning Signs

The funds this woman used to redecorate her home were not acquired honestly. They were obtained as part of an embezzlement scheme that lasted for at least two years. Because she attempted to cover her tracks by destroying the financial records, forensic accounting professionals were called in to reconstruct the activity using the school’s enrollment records.

The fraudster was thwarted in this instance … but this is certainly not an isolated incident. In fact, it happens more than you might think.

According to the 2016 Report to the Nation on Occupational Fraud & Abuse by the Association of Certified Fraud Examiners (ACFE), the typical organization loses 5 percent of its annual revenue to fraud. The group estimates that the potential financial loss to organizations worldwide due to fraud is at least $3.7 trillion dollars. The median loss in this particular study, which compiled data from 2,410 cases of occupational fraud in 114 different countries, was $150,000. Nearly one-quarter of all frauds in this worldwide study topped $1 million or more.

What Are You Doing To Prevent Fraud In Your Organization?

If you are looking to significantly decrease the fraud threat in your organization you must have a strategy in place to prevent and detect it. And if a fraudster is in your midst, implementation of anti-fraud controls are effective are an effective way to shut fraud down faster. The Report to the Nations states that the presence of anti-fraud controls correlated to fewer losses and quicker detection.

Which Control Is The Right Control?

According to the report, the top five anti-fraud controls utilized by organizations today are:

  1. External Audit of Financial Statements
  2. Code of Conduct
  3. Internal Audit Departments
  4. Management Certification of Financial Statements
  5. And External Audit Internal Control over Financial Reporting

But are they the most effective?

Over the course of this study, researchers found that the five most effective controls when it comes to preventing and stopping fraud are:

  1. Tips
  2. Internal Audits
  3. Management Review
  4. By Accident
  5. Account Reconciliation

A key opportunity to guard against fraudulent behavior is still being missed. For example, while tips were the most common detection method regardless of whether a hotline was in place, fraud schemes were detected by tip in 47.3 percent of cases at organizations that had fraud hotlines. In contrast, only 28.2 percent of cases were detected by tips at organizations without hotlines. It’s clear that businesses and organizations should invest in a fraud prevention strategy that encourages anonymous tips if they aren’t doing so already.

Is your business or organization at risk? Do you want to learn more about which controls are most effective at preventing and detecting fraud? To learn more on this topic, email Rea & Associates.

By Annie Yoder, CPA, CFE, CFF (New Philadelphia office)

Check out these articles for more fraud-prevention strategies:

Let’s Talk About The F-Word

Cost-Effective Ways To Deter Fraud

How Much Money Could You Be Losing From Fraud?

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