Business owners engaged in fraudulent activities often try to manipulate their companies’ financial statements. Fortunately for fraud experts, business owners’ tax returns aren’t as easy to misrepresent. Certain items on an owner’s Form 1040 can reveal hidden assets and income sources, particularly lines reporting income from wages, tax-exempt interest income, retirement plan distributions and refunds. […]

Are you harboring fictitious vendors in your accounting system? These are vendors invented by an employee — usually someone with the authority to approve invoices — to embezzle from the company. Thieves fabricate invoices and deposit payments to the fictitious vendor in their own bank accounts. This scam is easier to perpetrate in companies with […]

Gift cards offer businesses a convenient way to reward employees and thank customers. However, gift card scams targeting companies are popular and becoming more so. Since January 2017, losses have topped $1 million. In a typical scheme, fraudsters send employees “spoofed” emails asking them to buy multiple gift cards on behalf of a company executive. […]

Abusive tax shelters are transactions that have no legitimate business purpose and are used solely to reduce or eliminate tax liability. Unfortunately, business owners can be tricked into using one of these shelters and end up facing back taxes, interest and penalties. To protect yourself, be wary of unsolicited offers that promise to make you […]

Without strong controls over the use of cash registers, your business risks serious financial losses. Issuing fictitious refunds and falsely voiding sales are common ways employees steal money. Both involve disbursing cash without returning inventory and, thus, usually result in high inventory shrinkage. Other red flags include disparities between gross and net sales and missing […]

Your company has landed a lucrative new account, and the customer has already placed several small orders, paying in full, on time. Now the customer wants to place a larger order, but has requested that you first expand its credit account. Warning! There’s a chance that you could become a victim of bankruptcy fraud. Your […]

To protect your business’s computers and mobile devices from employee theft, consider adding security plates and indelible markings. These additions can help you find stolen property, inhibit its resale and discourage thieves. You can also track equipment using preinstalled security software and through sites such as Google and Facebook. A current IP address will be […]

Because most physicians have no background in business management or accounting, medical practices can be easy targets for occupational fraud. Crooked employees might steal receipts or cash on hand, alter or forge checks, submit fictitious invoices, or pay personal expenses with practice funds. Strong internal controls can help prevent such schemes. So can regular risk […]

To boost your company’s antifraud efforts, ask a fraud expert to provide employee training. A forensic accountant can make an on-site presentation that uses role-playing to help staff understand various fraud schemes and how perpetrators identify their victims’ vulnerabilities. A general presentation might cover cyberfraud, loan scams, fraudulent charitable solicitations and payroll and other accounting […]

If you suspect occupational fraud, you’ll want to engage financial and legal advisors to handle the investigation. But, before they arrive, you may need to perform interviews to help resolve doubts and obtain information. Aim for informal conversations and remain calm and nonthreatening. If you believe someone is withholding information, try asking more detailed questions. […]