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Fraud Prevention and Training

Fraud-AwarenessDeclining corporate and individual ethics are significant challenges for businesses today.  According to the Association of Certified Fraud Examiners 2012 Report to the Nation, organizations lose an estimated 5% of their revenues to fraud each year.  Fraud is more common at smaller organizations, those with fewer than 100 employees, with median losses of $147,000. Fraud is a very real risk for your business. To learn more, check out our “Summing it Up” fraud blogs.

So what can you do to prevent fraud?

 Fraud prevention can be anchored around two areas – strong internal controls and a hotline.  Internal controls are the single most effective measure to assist in deterring fraud.  A hotline is the most effective method to detect fraud.

An internal control review can suggest cost effective ways to strengthen your internal controls.  For most small businesses, common weaknesses are inadequate reviews of transactions and lack of account reconciliations.  We have assisted numerous governmental, nonprofit, and private industry clients in their design of efficient and effective internal control procedures to detect fraud timely, and to prevent fraud from occurring.

Most fraud is exposed as a result of tips and complaints by other employees. The 2012 Report of the Nation showed that fraud was much more likely to be detected by a tip than more traditional methods such as internal audits.  An interesting note is that in frauds committed by owners and executives, which are generally the most costly frauds, over half the cases, were identified by a tip. The Report also found that having a hotline can reduce fraud losses.

How can Freed Maxick help?
Our highly trained team can provide ethics training, monitoring services on a periodic basis throughout the year and assist you in setting up a free hotline.  Freed Maxick utilizes a confidential reporting process where an employee would provide information about a transaction.  We along with your Company will research the alleged transgression and seek to improve the situation by identifying what has happened, why it happened and how to prevent it from happening again.  We offer anti-fraud services in all three critical phases of fraud protection:

  • Fraud Protection Improvement- Detailed analysis of anti-fraud practices, systems and policies, resulting in recommendations for and/or development of, improved policies. Training of board members, management, department heads and supervisors. Assistance in implementing anti-fraud practices, systems and policies.
  • Monitoring– A specialized form of internal auditing devoted to periodic evaluation of organizational compliance with anti-fraud policies and analysis of indicators of fraudulent activity. The results of our work will be communicated to appropriate levels of management. Freed Maxick has assembled, trained and developed a team of professionals with a variety of pertinent skills and backgrounds to provide anti-fraud services. Freed Maxick has experience in broad area of industries including manufacturing, non-profit and healthcare.
  • Investigation– If fraud or abuse is suspected or alleged, Freed Maxick can assist with performing all the investigative services necessary to maximize your recovery of lost resources and testify against the perpetrators.

In addition, Freed Maxick can setup a confidential tip-line that can be used by your employees to report any potential concerns within your Company.  A complaint form can be utilized to report allegations fraud, corruption or abuse.  These complaints will remain confidential.

CONTACT US to learn more about our Consulting Services.

ABOUT US: Freed Maxick CPAs, P.C. is Western and Upstate New York’s (NY) largest public accounting firm and a Top 100 firm in the U.S. Freed Maxick provides audit, tax and consulting services to closely-held businesses, public (SEC) companies, not-for-profits and governmental entities in Buffalo, Rochester, Syracuse, Albany and NYC, New York.