Unravelling Financial Fraud: A Journey of Anomalies and Analysis 

/
Unravelling Financial Fraud: A Journey of Anomalies and Analysis 

Toward the end of the spring season, our team was contacted by the internal audit head of a global retail organization who requested that we investigate several abnormal transactions in a recently acquired subsidiary, referred to as "PQR," located in the western region of India. During a detailed discussion with the IA Head, he provided us with a brief overview of the anomalies, which included irregular transactions that were restated as follows: 

Read More

Benford’s Law: Applications 

/
Benford’s Law: Applications 

This blog serves as part two in a three-part series on Benford’s Law. To read part one, click here. Benford’s Law is one of the most interesting things that so many don’t know about — it feels like a trick, but it’s simply a law that applies for no apparent reason. Benford's Law is a theory that says that in lists of numbers, the first digits of the data set follow a pattern, i.e., random numbers aren’t always as random as you think they are. For more information about Benford’s Law, please see the previous blog in this series, Benford’s Law: What It Is and Why Fraud Examiners Use it.

Read More

Benford’s Law: What It Is and Why Fraud Examiners Use It 

/
Benford’s Law: What It Is and Why Fraud Examiners Use It 

Benford’s Law can be a tricky concept to grasp at first. Here are the basic things to remember: It relies on the idea that the distribution of digits in multi-digit natural numbers is not random; instead, it follows a predictable pattern. More on that later.  It applies only to “natural numbers.” The definition for natural numbers and non-natural numbers in a fraud examination are different than they are in math, so don’t let that throw you off. Here’s how we define them for Benford’s Law. 

Read More

Fraudulent Manipulation of Bank Statements in Electronic Format

/
Fraudulent Manipulation of Bank Statements in Electronic Format

Bank records are of particular interest and importance to forensic accountants and receivers, as they reflect an entity’s actual financial history. In fact, bank records can tell a powerful story.

We recently identified bank statements in several of our investigations that were electronically manipulated to reflect deceptive and fraudulent statement entries. Both the descriptions and amounts were changed for electronic payments, such as wire transfers and debit card transactions reflected on statements. In some cases, deposits were altered to reflect greater cash inflows, and the balances were manipulated such that they rolled forward, helping the manipulations go unnoticed.

Read More

Fraud Talk: Case Study: Fraud and Corruption in Youth Sports

/
Fraud Talk: Case Study: Fraud and Corruption in Youth Sports

In episode 105 of Fraud Talk, Stephen Griffin, CPA, describes how his professional and personal lives changed after discovering fraud and corruption in a youth sports company.

In this excerpt from the full transcript, Mandy and Steve discuss the red flags that initially alerted Steve to potential fraud, including one harrowing moment in the board room, which ultimately led to a robust investigation.

Read More