4 Scenarios That May Call For A Certified Fraud Examiner
A certified fraud examiner is a professional who knows how to check for signs of financial misconduct. Typically, an examiner has a background as a forensic accountant. If you're worried that you may need to speak with a CFE about a problem, you should consider whether you're facing a situation suited to their skills. You might need to bring in a CFE if you're looking at one of the four following scenarios.
Finances Don't Line Up
In extreme cases, there may be money missing. However, some folks who commit fraud try to move numbers around to cover for the disappearance of money. Consequently, you can't just look at the bottom line. For example, they might try to pass fraudulent actions off as standard operating losses that largely line up with expectations. A certified fraud examiner can look for signs someone was moving numbers or money around to cover for such actions.
Internal Resistance to Administrative Changes
If somebody has carved out a little fiefdom within an organization so they can commit fraud, they may resist administrative changes. Especially if the resistance makes no sense, such as someone resisting additional help, you may want to take a closer look at the numbers to see if anything is going on.
Tight Relationships With Third Parties
One of the most tempting scenarios for fraud is when employees have tight relationships with outside parties. This is especially the case when those employees have control of at least some of an organization's money or assets.
Salespeople, for example, may use the purchasing process to hide fraud. If you're not closely monitoring the transactions, they may load significant amounts of money into kickback schemes, unauthorized purchases, quid-pro-quo arrangements, and other sketchy transactions.
Purchasers also may commit fraud. For example, a purchaser might insist they have to work with a specific supplier. Upon investigation, you may discover there's nothing special about the supplier. If you see this pattern, you should have a CFE check into it.
Another common source of fraud is writing down excess expenses for reimbursements. An employee might receive reimbursements for business meals while traveling, for example. They might add one or two meals per trip to goose the reimbursement amount. If an employee's reimbursement requests seem out of line with what similar people in the business are seeking, you may need to investigate. Likewise, you might see an increase in reimbursements requests without a corresponding uptick in travel or business.
For more information about fraud examination, contact a local company, like Capital Financial Forensics and Accounting.