Attorney At Law Magazine Vol 5 Issue 10 - Page 26

Forensic Accounting Fraud Risk Assessment By Joe Epps, CPA/CFF/ABV, CFE, CVA A lthough the economy is improving, high unemployment, depressed home values and general uncertainty create tremendous financial stress among even trusted employees. Stress is one of the factors that contribute to the potential for employee fraud. Even long-term and highly-trusted employees are not immune to personal stressors, and, given the right conditions and opportunity, may be tempted to cross the line. The stressors may include: a relative losing a job, potential foreclosure on a home, declining home values or continued uncertainty about the future. Management may know how they are treating their employees, but they usually have no idea about other outside stressors that can impact even the most honest and diligent employee. Management has a duty to protect each employee through the implementation of a strong internal control system with defined policies. Furthermore, this system must include a clear mission statement that is echoed throughout the organization via the tone from the top. There are three key types of people who commit employee fraud: 1. True Criminals – They are always looking for a way to take advantage. 2. Opportunistic Criminals –the employee who, day after day, sees an opportunity to gain some financial advantage through theft or embezzlement at their company. Although the opportunities have existed for years, they have never committed or seriously considered committing a fraud against their employer. However, under stress they may act on an impulse Joe Epps is a CPA and CFE with over 30 years of experience in forensic accounting. His litigation support experience includes con- and give in to the temptation. 3. Stress Criminals – This is the employee who, under extreme stress, looks for a way to steal property or embezzle money. tract disputes, antitrust, economic damages, From the company’s standpoint, catching and prosecuting the true criminals is both necessary and fraud investigations, busin ?????????????()????????Q????????????????????????????????????????????????????????????????????????()???????????????????????????)????????()??????????????!???????????????????????????????????????????????????????????????()???????????????????????? ???????)?????????????????????????????????)???????????????M???U?????????()Q?????????????????????????????????????????????????]??????????????????????????)?????????????????????????????????????????????????????????????????????????????()???????????????????????????????????????()????????]???????????????????????????????????????????????????????????????????????????()??????????????????????()?????????????????????????????????????????????????((0