Types of businesses prone to Cash Larceny and Billing Schemes
Not what you're looking for?
What types of businesses and industries are particularly prone to Cash Larceny and Billing Schemes?
Purchase this Solution
Solution Summary
The types of businesses prone to cash Larceny and Billing Schemes are discussed.
Solution Preview
Small businesses have every reason to worry about fraud. According to the Association of Certified Fraud Examiners' (ACFE) "2002 Report to the Nation on Occupational Fraud and Abuse," the per-employee losses from fraud in the smallest businesses are 100 times the amount of their largest counterparts. (The complete report can be downloaded at www.cfenet.com.) Thus, this is an area in which CPAs can be valuable consultants to their clients. Most small businesses don't have a need for a CPA to do a full audit; however, CPAs can provide a number of fraud prevention services.
Employee education. CPAs can conduct on-site training for clients in the form of live presentations and/or computer-based education.
Internal control reviews. Reasonable internal controls are critical in a small business. A CPA can review the existing system and make recommendations for improvements.
Cash reviews and reconciliations. Since 9 in 10 occupational frauds involve the company's cash, CPAs can regularly review receipts and disbursements for anomalies. Although this is an excellent deterrent, it's important to realize that no CPA can guarantee that any specific procedures will uncover fraud.
Inventory observations and asset verifications. For companies with inventory or other assets that make attractive misappropriation targets, CPAs can observe inventory procedures and/or verify specific items. Both the 1996 and the 2002 ACFE study showed a similar trend: Small business is very vulnerable to fraud. There appear to be three reasons.
Inadequate employee prescreening. Small businesses ...
Purchase this Solution
Free BrainMass Quizzes
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Operations Management
This quiz tests a student's knowledge about Operations Management
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce