Are you a victim of company fraud? Unfortunately, insider fraud has become increasingly sophisticated due to higher knowledge of digital technology. You need high skills in following money trails both on paper and digital platforms. A forensic accountant is the professional often called upon to discover irregularities and support the prosecution of crimes if necessary. They dive deep into financial and IT records to uncover patterns or lack thereof. They will also document system failures, how exploitations occur, and how they can be sealed. What role do they play in protecting and prosecuting fraud in your business?
1. Discover Ghost Workers and Padded Payrolls
A forensic accountant can help you discover ghost workers and padded payrolls. These are practices that allow for the overstatement of payroll costs. Payroll fraud can happen in various ways. Ghost workers appear on the payroll but can't appear when a headcount is called.
Smarter payroll padding would also include overpaying for employee overheads such as health insurance. The fraudsters collude with service providers to perpetrate a crime difficult to uncover. The accountant may be able to find evidence that can be used in court to prosecute the perpetrators.
2. Discover Under-reported Income
A forensic accountant has the knowledge and skills to detect under-reported income. For example, the fraudster may report a higher number of vacant units for a rental property. A forensic accountant can help you discover a mismatch between your income streams and reported income.
3. Discover Supplier Fraud Overpayments
When a supplier attempts to defraud your business, they may provide documentation that shows an inflated payment amount. This includes overpayments to untraceable or briefcase LLCs, which could be local or foreign. A forensic accountant will find this documentation and prove it was fraudulent.
4. Discover False Debts and Obligations
False debts and obligations are often entered into accounting records to give the illusion of a company's overall financial health. Forensic accounting can detect these false debts and obligations and provide you with proof to take legal action against the perpetrators.
5. Discover Inventory Pilferage
Inventory pilferage is often difficult to detect. A forensic accountant can help you discover inventory control issues that can be used in court. They uncover how inventory is being stolen and sold on the black market and who is selling it. This information can help you recover your lost inventory, stop the thief, and prosecute them if necessary.
Insider fraud can be very difficult to discover and very damaging to a business, sometimes leading to collapse.
Contact an accountant to learn more about forensic accounting.
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