Reputation Impact From Fraud

Reputation Impact From Fraud Stakeholders beware.  A declining reputation can have a significant impact on an organization.  Just two and a half years after the initial public offering (IPO) of Basin Water, Inc., they were forced to issue a press release that would prove to be the beginning of the end.  The company was defunct within one year of the initial press release which indicated a potential problem involving the operational risk of financial statement fraud pertaining to revenue recognition.  This is merely one example where 72% of Securities and Exchange Commission (SEC) investigations in fiscal year 2010 identified deficiencies with 42% resulting in “significant findings”.   When those issues are… Read More

Continue Reading
Report to the Nations 2012 Global Fraud Survey

ACFE Report to the Nations 2012 Global Fraud Survey

ACFE Report to the Nations 2012 Global Fraud Survey Issued Tuesday, May 8, 2012 Summary of Findings ___________________ • Survey participants estimated that the typical organization loses 5% of its revenues to fraud each year. Applied to the 2011 Gross World Product, this figure translates to a potential projected annual fraud loss of more than $3.5 trillion

Continue Reading
Fraud Doctor

Shipping Costs and Inventory Fraud

Shipping Costs and Inventory Fraud Are you at risk for inventory fraud?  A simple evaluation of shipping costs relative to sales over time could indicate a greater risk for inventory fraud (Bell, 2009). SHIPPING COSTS % Definition: Shipping costs expense divided by total sales: (Shipping Costs Expense) / (Total Sales) Measurement Unit: % Measures: The relationship between shipping costs and sales. Fraud Indicator: An increase is a red flag for early delivery and bill & hold schemes.  A decrease could indicate fictitious revenue. Fraud Red Flag: Increase : Revenue recognition: Early delivery scheme Increase : Revenue recognition: Bill & hold scheme Decrease : Revenue recognition: Fictitious revenue References Bell, A. … Read More

Continue Reading

Is your company at risk for fraud?

We help companies better understand and manage their fraud risk. We help organizations protect themselves from fraud to reduce risk, educate, and through outreach. Is your company at risk for fraud? All companies have an inherent risk for fraud estimated at 5% of revenue, according to the 2014 ACFE Report to the Nations on Occupational Fraud and Abuse. In response to the inherent risk for fraud, many companies are developing antifraud programs. The ultimate goal of an effective antifraud program is to mitigate risk to the organization due to fraud through a combination of preventative, detective, and deterrent controls. What is your company’s risk for fraud? Do you have a… Read More

Continue Reading