Although there is no guarantee that specific procedures will uncover fraud, the presence of an outside “watchdog” can be a strong deterrent to fraud. If an organization does not proactively identify and manage fraud risk, the organization could be put out of business entirely.
The Fraud Risk Checkup (FRC) consists of twelve key questions that will establish a baseline in your organization’s fraud prevention processes, as indicated by numerical scores in key areas. It takes approximately 30 minutes to complete, and is far less detailed than the Fraud Risk Assessment.
Fraud Risk Assessment
The Fraud Risk Assessment (FRA) identifies major gaps (Fraud Risk Factors) in your organization’s fraud prevention processes and can uncover areas that can leave your business ripe for fraud. As part of the FRA, we study the organization’s internal and external processes as they relate to opportunities for fraud. This involves interviews with your employees as well as discussions with management. We keenly look for opportunities for employee misconduct or unethical behavior and determine if and how existing policies can be circumvented.
Policies and Procedures Review/Audit
A thorough review/audit of existing policies and procedures can uncover areas that can leave your business ripe for fraud. We look for opportunities for employee misconduct or unethical behavior and determine if and how existing policies can be circumvented.
We conduct a thorough review/audit of all vendor and business partnerships to uncover any billing errors, billing schemes, potential conflicts of interest, as well as any unauthorized modifications to contracts and agreements.
Review/Audit of Accounting and Bookkeeping Journals and Transactions
We conduct a thorough review/audit of all accounting and bookkeeping journals as well as any transactions that occur out of the ordinary course of business.
Review, Test and Monitor The Effectiveness of Internal and Fraud Prevention Controls
We review, test and monitor the effectiveness of internal and fraud prevention controls at intervals which are determined by the clients’ needs.
Cash Review/Audit and Reconciliations
Since 9 out of 10 occupational frauds involve the company’s cash, we can regularly review/audit receipts and disbursements for anomalies that can indicate fraud.
A Proactive Fraud Examination is conducted when there is high risk for fraud, but clear evidence of fraud is unknown. There may or may not be indications of fraud and the objective is to determine whether or not evidence of fraud exists.
Reactive Fraud Examination
A Reactive Fraud Examination is conducted when there is high risk for fraud and there are clear symptoms or indications that fraud is occurring. The Certified Fraud Examiner searches for and compiles the evidence necessary to ascertain the existence of fraud.
Witness and Suspect Interviews
During the course of a Fraud Examination, it is common practice to interview a witness who may provide critical information or to conduct an admission seeking interview of a suspect who may be culpable of the fraud under examination. These interviews are handled confidentially and the objective is to draw out the facts.
Educating employees and managers about the potential for fraud in an organization along with communication of management policy on fraudulent activity are paramount in creating a climate of ethical behavior. We conduct on-site training to educate managers and employees on how to identify the red flags that signal wrongdoing and controls for deterring and detecting fraud.
Litigation Support Services
As Certified Forensic Accountants, we assist attorneys in matters involving pending or existing litigation with: issue identification, fact-finding, analysis, discovery assistance, document management, settlement assistance, expert testimony, trial and deposition assistance, pre-trial and post-trial support, negotiations, arbitration, mediation, training and the quantification of economic damages or the calculation of economic losses.
Conventional Audit vs Forensic Audit
|Timing||RecurringAudits are conducted on a regular recurring basis||Non-recurringAudits are conducted only with sufficient predication|
|Scope||GeneralThe scope of the audit is an examination of financial data||SpecificThe purpose of the audit is to resolve specific allegations of fraud|
|Objective||OpinionAn audit is generally conducted for the purpose of expressing an opinion on the financial statements or related information||Affix blameThe audit’s goal is to determine whether or not fraud has occurred or is occurring and to determine who is responsible|
|Relationship||Non-adversarialThe audit process is non-adversarial in nature||AdversarialThe audit involves efforts to affix blame and is adversarial in nature|
|Methodology||Conventional audit techniquesAudits are conducted by examining financial data and obtaining corroborating evidence||Forensic audit techniquesAudits are conducted by:
A) Document and transaction examination and analysis
|Standard||Professional skepticismAuditors are required to approach audits with professional skepticism||ProofAuditors approach the resolution of a fraud by attempting to establish sufficient proof to support or refute a fraud allegation|