An Inside Look At Occupational Fraud
- Tip Sheet
By Tom Beane
January 2007
Potential Warning Signs:
Poor
Internal Controls:
More than any other factor, poor internal controls (a lack of
segregation of duties) contribute to an environment where fraud
can occur undetected.
Management's
Attitude and Actions:
Be wary of managers who are not candid and responsive. There
may be something they don't want you to know.
Quality
of Financial Statements:
Be wary of financial statements not received on time or that
do not include a signed outside auditor's report.
Timeliness
of Closings:
Today there are companies that can close their books in one
day. Late reporting may simply be the result of sloppy bookkeeping
but a continued inability to provide accurate, timely reports
is a major warning sign.
Software
Conversions:
Believe it or not, we have seen this used as an excuse in a
number of instances as a cover for fraud. Simply put, software
conversion times vary but typically a plan supported by management
can be completed in a defined timeframe. A well-thought-out
conversion will allow for legacy systems to run parallel with
new systems - providing reliable and timely data until the new
system is operational.
