Employee dishonesty can occur at all levels of a company, but the most costly frauds are committed by executives and upper management. Suspected frauds need to be investigated by an experienced forensic accountant, especially if the fraud was committed by a member of upper management. It is impossible to know the full extent of the theft and dishonesty without a fraud examination.

The most common type of internal fraud is asset misappropriation, which involves the theft of cash, inventory, customer payments, payroll funds, and other company property. Although this type of fraud occurs most often, the amount of money lost through each of these frauds is relatively low.

The most expensive type of internal fraud is financial statement fraud. The manipulation of financial statements often causes losses in the millions of dollars. It is often more difficult to detect than other types of fraud, as managers and executives may be colluding to alter financial records.
The third category of internal fraud includes bribery and corruption. These cases include bribes or kickbacks for the awarding of favorable contracts or terms. Also included in this category may be political corruption.

Common "red flags of fraud " that can arouse the suspicion of an alert employee include missing documentation, inside tips, and altered documentation. Often, fraud within a company is discovered completely by accident. When fraud is suspected or confirmed, it is advisable to utilize the experience of a proven expert in forensic accounting and fraud investigations..

Experience

Our experience analyzing claims of fraud by a CFO, VP of Finance, Accounting Manager, or other employee includes cases of:

• Fraudulent financial statements
• Misleading, incomplete, or untruthful disclosures
• Embezzlement or employee theft
• Purchasing schemes and procurement schemes
• Kickback schemes and bribery schemes
• Fictitious vendors or shell company schemes
• Theft of accounts receivable
• Pay-and-return schemes
• Theft of accounts payable
• Falsification of inventory to cover thefts
• Excess charges by subcontractors
• Personal use of company resources
• Expense reporting fraud
• Bribery and corruption, both private and public sector

Services

Tracy L. Coenen will conduct an examination to determine whether a fraud occurred, who was involved, how the fraud was committed, and how much has been lost. Tracy specializes in making financial frauds understood by non-accountants, and she will assemble the relevant documentation in a format that will be understandable and useful in the event of civil or criminal prosecution.

Sequence Inc. can also recommend policies and procedures that aid in fraud prevention. We can also help implement controls to prevent fraud, and provide anti-fraud assistance to company personnel on an ongoing basis.