Forensic and Valuation

  INSIGHTS FOR ATTORNEYS

JUNE 6, 2016    
CONNECT
Director of
Forensic Services  
Jeremy Bendewald

Director of Valuations
866.999.8362 
  
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ABOUT US

Eide Bailly is a top 25 CPA firm in the nation. We provide timely and cost efficient litigation services to attorneys, insurance companies, business owners and individuals. 
Fraud: Current Trends & Information
 
Trillions of dollars of revenue worldwide is lost due to fraud. According to the Association of Certified Fraud Examiners 2016 Report to the Nations on Occupational Fraud and Abuse, 5 percent of annual revenues are lost to fraud--that is $3.7 trillion worldwide. While the median loss was $150,000, 23 percent of cases involved losses of greater than $1 million. Typically, smaller organizations suffer the larger losses. It is important to be aware of the current trends in fraud so your company can avoid occupational fraud and abuse.
 
In 83 percent of fraud cases, the fraud involved asset misappropriation. Most frequently victimized were private companies and those in the banking and financial services industry. While employees were typically the perpetrators, owners and executives were the ones who generated the largest fraud losses. The primary weakness in many of these cases was lack of internal controls.
 
An example of poor controls in a small business can be seen in an actual fraud examination performed by Eide Bailly. The bookkeeper for a tile company was responsible for daily tasks including collecting sales receipts, completing deposit slips and making deposits. After a period of time, the bookkeeper began to remove checks and hid them in her desk. Later, when the daily sales included an amount of cash that matched one or several of the checks which had been set aside,the bookkeeper exchanged the cash for checks and made the daily deposit. No one in the company was aware the cash was missing until it was discovered revenue numbers would not reconcile. By the end of the scheme, the business lost more than $150,000.
 
Some simple controls could have prevented this scheme. Click here to learn more about business considerations. 

Jeremy Bendewald  

 

Jeremy Bendewald

Director of Forensic Accounting   

701.239.8513

 

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