To many, the term “forensic” might elicit images of high-profile government work, cases that seem relegated to the kinds of investigations we see on primetime television. But acquiring a forensic accountant for the daily operations of small to mid-sized businesses is a much greater necessity than noted at first glance. So why should you hire a forensic accountant in Middle Tennessee?
A business will often elect to hire a fraud accountant due to suspicious activity regarding their financial resources, typically committed by an employee. At Janicek Valuation And Forensic Services, we bring a combination of experience between accounting and investigative services, using this skill set to identify and analyze committed fraud in a wide range of everyday cases.
Though we may wish to believe the best in those we hire, it is often those we trust the most who understand a company’s vulnerability, and therefore possess greater insight into the most efficient ways to commit fraud.
The “Fraud Triangle” represents the incentives and mode of operations used by those who commit fraud within a business. First, an employee might feel an enormous amount of pressure to reign in further income, due to stresses from family members, cyclical and expensive addictions, or compounding debt. Next, they go through a rationalization process; knowing what the end result will be, they find a way to justify the means of their actions. Lastly, fraud committers seek out the right opportunity to perform their operation; they search for loopholes and access ways into a company’s assets and resources to leverage for their personal benefit.
Another common use of a forensic accountant is to investigate financial matters that pertain to marital dispute and dissolution cases. It is often the case that a business might be owned between two divorcing spouses, and an attorney will suggest hiring a forensic accountant to research expenditures, assets, and allegation of resources.
Hiring a forensic accountant to sort through committed fraud is certainly a worthwhile venture. However, the cheapest and most efficient way to make use of forensic accountant services is to hire one in a preventive mode.
According to the ACFE, the median amount of money lost in small to mid-sized businesses due to fraud in 2014 was a grand total of $145,000. By paying due diligence to a business’ accounting controls, you can help diminish the amount of fraud that could potentially wreak havoc on your company.
Finding someone you trust to set up these accounting controls, and having an orderly system with a set of rules and standards and a proper division of responsibility, is one of the most crucial aspects to protecting your business against fraud.