Partner, Michael Napolitano, discusses a client financial fraud case study in September 8, 2017 feature article in COMMERCE magazine titled, “Forensic Accounting Catches Fraud and Exposes White Collar Crime”
As seen in COMMERCE Magazine
WHITE-COLLAR CRIMINALS ARE always looking for new ways to steal time and money, but forensic accountants are catching many of them in the act, assisting clients and protecting their assets. Here are some case studies that show how CPAs are finding the crooks and uncovering their clandestine activities.
Our client’s bookkeeper had control over all aspects of banking, including check writing, receiving payments, making deposits and recording transactions. As part of Citrin Cooperman’s internal controls review, we asked to meet with the bookkeeper to assess his responsibilities and discuss implementing some separation of duties. The bookkeeper was repeatedly unavailable so, with the owner’s permission, we came without notice on a weekend to review the books and records. We immediately discovered that the bookkeeper was writing unauthorized checks to himself through QuickBooks, cashing the checks, then changing the checks to actual vendors so the owner would not detect the fraud—more than $17,000 was stolen within 18 months.
We advised the owner about reparation options, as well as future fraud prevention controls. Separation of duties was one simple remedy; we advised the owner to personally review online transactions on a weekly basis, and review bank statements each month.