Archive for Fraud Detection & Prevention
Fri 4 April 08 · Filed under Fraud Detection & Prevention
I’m doing another round of interesting search engine queries. Most of these were from Google. Some were from other search engines. But these are the things people are looking for, and it just happens to lead them to this site:
Search: sarbanes oxley act positive benefit
Answer: Not so much. I maintain that there has been little improvement in fraud prevention in companies, at too high a cost from Sarbanes-Oxley. There may have been incremental improvements, but they haven’t offered any significant reduction in fraud so far. (Reflections on Sarbanes-Oxley Act of 2002)
Search: Employee Expense Report theft [Read more...]
Fri 28 March 08 · Filed under Fraud Detection & Prevention, Writing & Blogging
Barb Bartlein is known nationally as “The People Pro“… offering advice and strategic assistance in dealing with people issues. She assists clients with management training, professional mentoring, and employee management issues. She’s a nationally syndicated columnist for The Business Journal, a successful author, and one funny lady. Her humor his lit up audiences for years.
She featured Essentials of Corporate Fraud in her recent newsletter, and this is the article she wrote about it: [Read more...]
Mon 17 March 08 · Filed under Fraud Detection & Prevention, Writing & Blogging
From the AOL Small Business welcome screen:
The actual post is on WalletPop today - When employees steal: Five reasons your business could be vulnerable to fraud. And the post links to my book, Essentials of Corporate Fraud.
There are already a couple of interesting comments. And they should get better throughout the day. AOL readers are always sure to leave unusual comments.
Tue 26 February 08 · Filed under Fraud Detection & Prevention
Question: why would companies overstate inventory
Answer: There are a couple of reasons why a company might overstate inventory. They both relate to reducing expenses and therefore increasing the company’s profit.
If inventory is overstated, it means that cost of goods sold is understated. This could be a case of not writing down inventory that has lost value, or of simply not expensing out items of inventory that have already been sold.
Inventory can also be overstated by dumping business expenses into inventory. What better place to hide expenses that you don’t want to properly recognize in the current year.
And it’s pretty easy to manipulate inventory figures. There are a ton of individual transactions throughout the year, and the auditors can’t possibly test many of them. And inventory counting procedures at year end are easily circumvented to cover fraud. This is a financial statement line item with a very high risk of fraud.
No matter the motivation or the mechanics of how it’s carried out, overstated inventory quite simply causes a company’s profits to be overstated as well.
Mon 25 February 08 · Filed under Fraud Detection & Prevention
If there’s one silver lining to this case, it’s that the defendants are apparently admitting that they cheated Social Security. But now the bigger problem is that they’re saying it’s the government’s fault.
Last month 83 people were charged with participating in a $663,000 fraud that spanned 15 years. The defendants are accused of falsely telling the Social Security Administration that their benefit checks were lost. They would receive a replacement check, and cash both the replacement and the original (which was never really lost).
But in true American style, the defendants say it’s not their fault. It’s actually the government’s fault that they stole money with this scheme. How could it be the government’s fault? The defense says that when the government found that both checks were cashed, they asked the defendants to repay it. *gasp* Really? [Read more...]
Sun 24 February 08 · Filed under Fraud Detection & Prevention
I recently did an interview with Sam Steele (that’s him at the right), the face of The US3 Report. He interviewed me on Corporate Fraud & Embezzlement, and of course, gave me a chance to promote my new book Essentials of Corporate Fraud.
The US3 Report calls itself: “The Ultimate Safety & Security Resource for the Business Executive.” Subscription to this resource is by invitation only, and is purposely capped at a small number, to ensure that subscribers are the recipients of exclusive information.
Much of the information in the monthly reports revolves around personal security and protection for the high-profile and/or high net worth individual. It’s clear that these types of people are bigger targets for criminals, both those committing physical crimes and those stealing identities and other personal information. [Read more...]
Tue 19 February 08 · Filed under Fraud Detection & Prevention
In a recent article in Fortune Magazine about felon turned fraudfighter Sam E. Antar…. Sam gave the following tips to investors about looking for fraud in public companies. I think it’s sound advice! [Read more...]
Wed 13 February 08 · Filed under Fraud Detection & Prevention
The former CEO of the First National Bank of Northern Kentucky was indicted in connection with a $4.5 million fraudulent loan scheme that he allegedly facilitated. Richard Thomas, who founded the bank in 1992, was charged with conspiracy to commit bank fraud and aiding and abetting the submission of false loan applications.
Details: According to court documents, one of Thomas’s longtime bank customers introduced him to John and Linda Van Winkle and Thomas subsequently began acting as their personal banker and the banker for their two businesses. Those “businesses,” Design Services and Koolsuit Inc., held patents for air-cooled bullet-proof vests and race-car driver suits. The patents, the value of which was undetermined, were nonetheless used to secure several of the 19 fraudulent loans made to the Van Winkles as well as to Ms. Van Winkle’s two daughters, one of whom was a fulltime law school student at the time. [Read more...]
Mon 11 February 08 · Filed under Fraud Detection & Prevention
A search that brought someone to my blog over the weekend gave me the idea for this post. Immateriality is a concept in accounting that amounts to “too small to matter.” Think of a company with $100 million in sales each year. If they made a mistake in recording their sales last year, and the number was really $99,950,000 (an error of $50k), would it matter?
Probably not. Whether sales are $50k higher or lower for a company with sales of $100 million really…. it’s just not a big enough difference to matter. [Read more...]
Thu 31 January 08 · Filed under Fraud Detection & Prevention
Not so much, according to Michelle Malkin. She’s got some great information that was fed to her by a House Ways & Means staffer, in light of the “economic stimulus” package that politicians are currently arguing about.
The Senate is arguing over whether or not to extend the normal 13 week unemployment benefits to add another 26 weeks of eligibility. Sounds nice, right? Wrong. It doesn’t do anything. It doesn’t improve unemployment figures. If anything, it just keeps people on their couches longer.
Here’s what the extension of similar benefits in the past got us:
- The extensions went on years longer than originally promised
- It cost taxpayers billions of dollars
- It didn’t reduce unemployment
Here are some snippets from the staffer: [Read more...]
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