Fraud Examination

Fraud

Fraud is an intentional act that causes the victim to suffer an economic loss and/or the perpetrator to realize a gain. From the global investigation and forensic accounting firm, Studler Doyle, we learned that the simple working definition of the term ‘fraud’ is “theft by deception”.

The legal definition is the same in both, criminal or civil offense. The difference however is that criminal cases must meet a higher burden of proof.

Major Categories of Fraud:

 

Asset misappropriations

This refers to theft or misuse of an organization’s assets. Experts from Aurora-based firm, Studler Doyle point out some common examples: skimming revenues, stealing inventory, and payroll fraud.

 

Corruption

This involves unlawful or wrongful misuse of influence in a business transaction with the aim of procuring personal benefit. This action is often opposite to an individual’s duty to his or her employer or the rights of another. Studler Doyle’s forensic professionals specify some examples: accepting kickbacks and engaging in conflicts of interest.

 

Financial statement fraud and other fraudulent statements

This entails the intentional misrepresentation of financial or non-financial information with the final goal to mislead others who are relying on it to make economic decisions. Examples given by the professionals from the global investigation and forensic accounting firm, Studler Doyle include overstating revenues, understating liabilities or expenses, or making false promises regarding the safety and prospects of an investment.

 

Fraud examination

The discipline of resolving allegations of fraud from tips, complaints, or accounting clues is called fraud examination. Studler Doyle's forensic professionals explain that fraud examination involves obtaining documentary evidence, interviewing witnesses and potential suspects, writing investigative reports, testifying to findings, and assisting in the general detection and prevention of fraud. As it has been further explained by Studler Doyle’s professionals, Fraud Examiner must know how to properly and legally obtain evidence, such as documents or statements by witness. Also, he must know how to write a clear, accurate, and unbiased report which reflects the fraud examination results.

However, the fraud examiner is only a gatherer of evidence. He is not the ultimate judge thereof. The fraud examiner is expected to testify his findings before judicial authorities.

Primary responsibility for the prevention of fraud lies with management or other appropriate authority.

Professionals from the Aurora-based firm, Studler Doyle we explained that fraud examiner’s task is to actively pursue and recommend appropriate policies and procedures to prevent fraud.

Nevertheless, once the fraud evidence is presented, he is expected to perform sufficient procedures, to resolve the issue.