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MAS Advisory - Fraud Detection

Thursday, April 23, 2009 - Tony Argiz, CPA/ABV/CFF, ASA, CVA, CFE & Mark R. Thaw, CPA/ABV/CFF, CVA

  • Tony Argiz
  • CPA / ABV / CFF, ASA, CVA, CFE, Chairman and CEO
  • targiz@mbafcpa.com
  • (305) 373-5500
Mark Thaw

Fraud is becoming more widespread as businesses and employees come under increased financial pressure. Those pressures, coupled with some businesses cutting overall staff and cutting budgets for fraud detection, have created an environment that is ripe for more thefts of company funds, manipulation of computer systems and other inside embezzlements. Businesses also are experiencing an increase in outside parties' thefts of corporate assets and of identities of employees and customers.

Fraud deterrence, like the saying goes, starts at home, that is to say, it starts with a business owner's commitment to vigilance, prevention and anti-fraud programs. Businesses utilize employee training, systems and computerized controls, internal audits and external audits in anti-fraud programs.

Those programs are designed to prevent and detect financial crimes and other fraud by employees, vendors and other outside parties.

Amid forecasts that the recession could linger into 2010, businesses should work with advisors to assure that they have adequate anti-fraud controls in areas that include employee training, computer systems and audits.

A report released this month shows that incidents of fraud have been rising more than 50 percent at businesses since last year.

The extent and growth of the fraud problem is detailed in a report by the Association of Certified Fraud Examiners (ACFE) , an organization of which the undersigned and several other MBAF partners and directors are members.

In the report, 55 percent of Certified Fraud Examiners (CFEs) said they have found an increase in the number of frauds committed at businesses during the past year.

In addition, 49 percent of the 507 CFEs in the survey said they have observed an increase in the dollar amount lost due to fraud during that period.

Citing the impact of the recession, 51 percent of examiners expect a significant increase and 37 percent expect a slight increase in fraud at organizations over the next 12 months. The biggest concerns are internal, with 70 percent of respondents expecting that employee theft will grow over the next 12 months.

The ACFE awards its CFE certification to anti-fraud experts who have demonstrated knowledge in fraudulent financial transactions, fraud investigation, legal elements of fraud, and criminology and ethics.

If you would like more information on helping your firm with anti-fraud programs or on the ACFE study, do not hesitate to call us at (305) 373-5500.