Forensic accounting uses accounting, auditing, and investigative knowledge to produce reports and analyses for use by courts and other investigative bodies. The goal of forensic accounting is to detect and eliminate fraud, prevent ethics violations, and supply data for litigation.
Led by partner, Tamber Alsop, and one of our directors, Penny Scovill, our forensic accounting division is highly knowledgeable and skilled in what can be a highly-demanding area of practice. Penny Scovill, our Chesterfield office’s Audit Director, has achieved the status of a Certified Fraud Examiner (CFE), requiring the completion of a rigorous curriculum of 100 hours of specialized training, a character and background investigation, and fulfilling certain experience requirements. Additionally, a CFE must continue to participate in continuing professional education and adhere to a special code of ethics for fraud examination.
The Cost of Fraud
Fraud accounts for billions of dollars of losses for businesses each year in the United States. Among other activities, fraud can take the form of accounts receivable manipulation, diversion of sales, fictitious vendors, payroll manipulation, petty cash theft, and expense account abuse. While there is a good deal of publicity regarding fraudulent activities at large companies, a recent study showed that small organizations (100 employees or fewer) actually suffer larger losses from fraud than large organizations (10,000 plus employees). In fact, small companies are over 100 times more vulnerable to fraud than their largest counterparts.
Any organization—including governmental units or not-for-profits—can benefit from fraud detection or prevention services. Our clients often include board members, CEOs, audit committees, company legal officers, outside counsel, and government officials.
Fraud isn’t inevitable. Actions can be taken to greatly curtail or eliminate fraud. We can train your organization in how to prevent fraud in the first place. Examples of such actions include:
- Create and maintain a culture of honesty and high ethics.
Set the tone at the top by setting achievable goals and expressing “zero tolerance” for unethical behavior. Also, train employees regularly regarding the organization’s values and code of conduct.
- Have strong system controls.
Identify ways to increase security in your computer, record keeping, and payment systems.
- Watch warning signs and create alerts.
Pay attention to the warning signs on the books. Create internal mechanisms that alert you to potential transgressions.
- Report irregularities.
Create an anonymous reporting system for employees who have witnessed or suspected illegal or unethical actions.
How We Can Help
Hochschild, Bloom & Company LLP can help in your fraud prevention efforts by:
- Helping you evaluate and strengthen internal controls.
- Performing an assessment of your system controls and security
- Conducting a fraud exposure audit
- Working with you to identify and monitor metrics that may provide early warning signals of activities that may be indicative of potentially fraudulent transactions and occurrences