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How To Investigate Your Accountant For Fraud? by ayo2pec(m): 9:44am On Jun 01, 2011 |
How Do You Tell If Your Financial Controller Is Defrauding Your Company Hello business men and women, however , this is for a sizeable company of saw N250M to N1B annual turnover. Everything may seems to be OK and yet , i have seen some friend businesses folding up even after series of visit of undiscerning external auditors. As a business owner what and what on the pages of financials do you look how for to at least check your accountant? |
Re: How To Investigate Your Accountant For Fraud? by lagerwhenindoubt(m): 11:10am On Jun 01, 2011 |
In light of what you have just outlined it seems your company does not have an internal audit/risk unit. it may also not have a reporting policy/standard around IFRS. That alone opens your company to fraud from internal sources especially if the source is a Financial Controller, they usually an Executive Director who is also on the Executive Committee (very powerful personnel) The easiest way is to seek external (independent) financial auditors (is it a private or public company) . you can also pick up published accounts from the previous year and compare figures. An indication of fraud is usually when the company tries to restate its accounts in the previous year when it plans to publish the current one. Some Fraud-prone Financial Controllers are easy to pick out from a crowd. 1: They have the company pay rent for living in their own houses 2: They are usually on extensive International Training un-related to their core job description 3: They want more cars than others their level. 4: They approve huge loans to themselves above their limit If you have a treasury unit and HR, they are usually the ones to ask |
Re: How To Investigate Your Accountant For Fraud? by ayo2pec(m): 4:39pm On Jun 01, 2011 |
Thank Lagerwhenindoubt, what Account do i look out for , it has been proved that visitation of external auditor do not really mean all is well , a lot of fraud has been done in the past even in the nose of Auditors. Am i lying |
Re: How To Investigate Your Accountant For Fraud? by lagerwhenindoubt(m): 5:56pm On Jun 01, 2011 |
Well External Auditors work with what they are given. try to get your hands on the Management Accounts and compare with the Financial Accounts. The Financial Accounts are what is given to External Auditors to work their Fraud-detection Magic, If a corrupt Financial Controller has been able to distort the Financial Accounts to look Clean, Then the Auditors will report a Clean Bill of Health. External Auditors value their reputation because that is the only reason they are in business, they won't risk it for anything else. Arthur Anderson lost a huge slice of her reputation because of the ENRON Scandal |
Re: How To Investigate Your Accountant For Fraud? by lagerwhenindoubt(m): 8:43am On Jun 02, 2011 |
Here are a few articles that give you an idea of how Financial Fraud happens Financial reporting fraud - Fraud Findings http://findarticles.com/p/articles/mi_m4153/is_n6_v50/ai_14836563/ IN A TYPICAL fraud, an employee, vendor, or customer profits from his or her misdeeds. This case involves a financial reporting fraud where the operating results were misstated in the income statement. The fraud had gone on for nearly a year; although all the symptoms were visible, no one did anything about it -- until the internal auditors performed a typical audit of food and beverage inventories. |
Re: How To Investigate Your Accountant For Fraud? by lagerwhenindoubt(m): 8:45am On Jun 02, 2011 |
A Thief in the Financial Controller's Office http://www.cfoinnovation.com/content/thief-financial-controllers-office For some companies US$4 million, the amount allegedly embezzled by a financial controller at global IT services firm Wipro, is very significant. But it’s not that large for the Indian giant, which had revenues of US$4.4 billion and profits of US$732 million in the first nine months of 2009. “The company’s internal investigation concluded that, while the matter should be taken seriously, the amounts embezzled were not material from a financial reporting perspective given the size of the company and the scale of its operations,” Wipro told its shareholders last month. |
Re: How To Investigate Your Accountant For Fraud? by olaolabiy: 9:07am On Jun 02, 2011 |
lagerwhenindoubt: This is NOT true. They all play game. lagerwhenindoubt: Yeah! But, auditors still do it. Do it or be CONTRACT[i]less[/i]. Moreover, AA went a bit too far. |
Re: How To Investigate Your Accountant For Fraud? by Dangello(m): 10:17am On Jun 02, 2011 |
ola olabiy: In the real sense, they dont play games cos they risk losing their practice licence should they try it. Smart accountants have been able to beat some of them to it though. |
Re: How To Investigate Your Accountant For Fraud? by WAP: 10:24am On Jun 02, 2011 |
Hi Ayo2pec, One key area that most business owners in this part of the world failed to realise is the importance of good Internal Control structure. Most businesses in Nigeria today have porous Internal Control/ Risk Management Framework. I am a Chartered Accountant with speciality in Risk Management and Internal Control/ Internal Audit, and I know what am talking about. External Auditors based their audit on samples; that is why the audit is called a sample based audit. They are not checking your transactions 100%, they only pick like 25 samples of say like 1,000 transactions for testing and use the result to generalise their findings. In reality, a lot of things go unnoticed. A clever Finance Controller who knows the likely Tolerable Error (T.E) that the External Auditors will likely use to pick their samples from can play around the fraudulent transactions and break them down into smaller accounts that will be below this T.E so that the Auditors will not pick this as samples. A lot of thing happen in practice but once you are able to put a good Internal Control Structure/ Risk Management framework in place, except where there is strong collusion, be rest assure that the fraud is taken care of. We can discuss further if you choose to. |
Re: How To Investigate Your Accountant For Fraud? by Dangello(m): 10:33am On Jun 02, 2011 |
@WAP God bless You. U've said it all. |
Re: How To Investigate Your Accountant For Fraud? by ayo2pec(m): 12:22pm On Jun 02, 2011 |
Thanks to all this is a little insightful. But what controls are you referring to Accountant or Financial controllers has a way of hiding their figures. what is suspense Account, other Assets liability, the GL seems to have a long list of Accounts under different headings with balances. our FC has been with us for the last 5 years (a fist class Graduate and a Chattered Accountant. How do we begin to engage him, one of the GL has balance over N100M, and 35000 items when it was downloaded, what and what can we ask of. We have 5 years audited Accounts. Please help. |
Re: How To Investigate Your Accountant For Fraud? by blank(f): 12:41pm On Jun 02, 2011 |
@ poster, what u are asking of is rudimentary accounting. Its not something that u should go into without training. What u need as others av said r independent internal auditors. They should do d checking. FYI, External auditors are not meant 2 look 4 fraud. If u want them to look 4 fraud, u need 2 get them 2 do an investigation n not an audit. |
Re: How To Investigate Your Accountant For Fraud? by WAP: 12:49pm On Jun 02, 2011 |
Ayo 2 pec, Get the service of an Internal Auditor. We can hep you to review your books, set up a functional Internal control and Internal Audit, develop your process narratives, identify your risks and look at your controls/ propose mitigating controls. All these will answers all your quaestions and the once you have not asked. Get me on 07082079814. |
Re: How To Investigate Your Accountant For Fraud? by ayo2pec(m): 1:58pm On Jun 02, 2011 |
ok will consider this, but why do some Accountants act fraudulently? |
Re: How To Investigate Your Accountant For Fraud? by akanbijm: 2:31pm On Jun 02, 2011 |
I think W.A.P knows he is talking about.Follow his instructions.You need an effective internal control sytem for you to monitor the daily transactions of your company and you can also engage the service of external auditors who would be monitoring the system from time to time so that the account staff would not deviate from the system. |
Re: How To Investigate Your Accountant For Fraud? by breathless(m): 3:00pm On Jun 02, 2011 |
@ ayo2spec. We can assist your organisation to set up a water-tight internal control/risk mgt structure that will ensure mitigation against fraud and reducing it to the barest minimum. If interested, send us a mail; info@edgestoneconsultingltd.com Cheers |
Re: How To Investigate Your Accountant For Fraud? by Reference(m): 3:35pm On Jun 02, 2011 |
In Nigeria today any formal audit internal or external can and will be compromised. The most effective means is to do the opposite arrange a sting operation. All transactions have a human face at one point or the other. Set them up and watch how they react. Tag cash, cheques, invoices or other instruments and follow the trail. |
Re: How To Investigate Your Accountant For Fraud? by OWOLAYEMO: 3:45pm On Jun 02, 2011 |
Please talk to me, we do conduct Special,Proprietary and Forensic investigation.We shall help you recoup your excess charges,investigate corrupt accountants and unethical fraudulent activities that would positively undepinned your bottom-line. Contact me on 08096769272 |
Re: How To Investigate Your Accountant For Fraud? by OWOLAYEMO: 3:46pm On Jun 02, 2011 |
Please talk to us, we do conduct Special,Proprietary and Forensic investigation.We shall help you recoup your excess charges,investigate corrupt accountants and unethical fraudulent activities that would positively undepinned your bottom-line. Contact me on 08096769272 |
Re: How To Investigate Your Accountant For Fraud? by damola1: 8:50pm On Jun 02, 2011 |
Auditors are crap jo, they can only work with the figures given to them, several time, I fired my auditor, and you'll have to create a system that works for you, They won't detect fraud, |
Re: How To Investigate Your Accountant For Fraud? by DisGuy: 10:05pm On Jun 02, 2011 |
you guys dropping number need to be a bit more professional, you are acting no different from all these Forex guys on Nairaland You should have a company name or registered business |
Re: How To Investigate Your Accountant For Fraud? by lagerwhenindoubt(m): 7:14am On Jun 03, 2011 |
Dis Guy: My thoughts exactly. looking at the figures the OP has been putting out, it would be wise - especially from an Auditor's perspective to be professional and put out as an Audit Firm. |
Re: How To Investigate Your Accountant For Fraud? by akanbijm: 2:58pm On Jun 03, 2011 |
Demola 1, never make a mistake about the duties of the external auditors.The primary duty of the external auditors is to express a professional opinnion on the book of accounts which you present to him.So, it is not the duty of the external auditors to detect fraud.It is the responsibility of the owner to ensure that proper book of accounts are kept and you can achieve this by setting up an effective internal control system with the assistance of a sound auditor. Please never neglect this aspect if you want your business to grow. If you neglect it. You are just just on your own because you will never know whether your business is growing or not.Please take note that it is not the duty of the auditor to dectect fraud |
Re: How To Investigate Your Accountant For Fraud? by damola1: 3:23pm On Jun 03, 2011 |
^^^^ I agree with you. However as a small business owner, my topmost priority is to make profits to grow and then to protect it very well. Setting up an internal system especially accounts to detect fraud is crazy, if the auditor cannot help you, who can? 3 times now he didn't detect anything, I did and I don't think it's OK at all, let had to fire him off, all he does is compile and submit records, which is what a good accounting packaging can do. |
Re: How To Investigate Your Accountant For Fraud? by akanbijm: 5:56pm On Jun 03, 2011 |
We have two types of auditors.These are internal auditors and extenal auditors.They have some similaries and differences.So, if you are talking about auditors, you have to be specify so that people can know what you are talking about.which one do you employ to detect fraud for you.If it is external or internal auditor? Please answer that |
Re: How To Investigate Your Accountant For Fraud? by NextGen(m): 5:46pm On Jun 08, 2011 |
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Re: How To Investigate Your Accountant For Fraud? by elvymoore: 6:42am On Jun 16, 2011 |
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