|FWhen a financial irregularity occurs the first response is “Is someone stealing from us? or Is this just an error?” To uncover the truth, a forensic accountant should be hired to help unearth hidden assets and liabilities, revenue and expenses — and even help solve crimes.|
How forensic accountants can help
If a client suspects that someone is stealing business assets or misrepresenting a company’s financial performance, it may be time to contact a forensic accountant. These experts specialize in conducting fraud investigations to detect irregularities and troubling trends, looking for both telltale and subtle signs of white-collar crime.
Often, forensic accountants are retained to detect misrepresentations of financial data or to locate missing funds. It’s important to investigate fraud suspicions as early as possible to help mitigate potential losses.
What can the forensic account provide
Fraud investigations assist clients in determining their next steps. It provides evidence for firing and suing employees for perpetrating a fraud or assists in determining the appropriate checks and balances for the company. It also provides management or the board with peace of mind.
Fraud investigations can be particularly useful to monitor the activities of top executives — even if only for policy lapses. Upper-management employees often are given greater latitude and may be tempted to bend the rules. When this occurs, it can influence the ethical environment of an entire company and encourage other employees to disregard policies or even commit fraud.
TheKFORDgroup conducted a forensic investigation this past Spring at San Antonio Board of Realtors (“SABOR”). We did not find any fraud commented by employees of SABOR but determined there was a failure to practice appropriate accounting procedures. A failure to maintain an effective system of oversight and internal controls was found. Click here for more information on this investigation.
When to call
As soon as the inkling of financial impropriety arises, consult a forensic accounting expert. His or her early involvement can help minimize fraud losses, preserve confidentiality and admissibility of evidence, and possibly even reduce overall litigation costs.