Embezzlement: The Role of CPAs in Forensic Investigation

Debbie Dickson

Embezzlement can be defined as the act of theft or misappropriation of funds belonging to an employer which have been placed in the trust of an employee (typically someone in a company’s financial department). Embezzlement is a type of financial fraud and usually is a premeditated crime, performed methodically and cautiously to conceal the theft. When successful, embezzlements may continue for many years without detection.

How can your business detect fraud? 

It is important to identify potential financial fraud as quickly as possible in order to limit damages.  Understanding how it happened to others can help.  To read about Ryan’s work in a recent case that made headlines, click here.

Forensic Accounting Support

At Smith Dickson, our forensic accounting specialists have logged thousands of hours of forensic accounting, deposition and trial experience, both as expert witnesses and consultants in matters ranging from economic damages to fraud and embezzlement.

Congratulations to Austin Ray, CPA

Austin Ray

Austin Ray, CPA, senior accountant, recently earned his Certified Public Accountant (CPA) designation and has been issued his license by the California State Board of Accountancy.  In California, to earn the prestige associated with the CPA license, individuals are required to demonstrate their knowledge and competence by passing the Uniform CPA Exam, meeting high educational standards and completing a specified amount of general accounting experience.

Congratulations, Austin!

Fraud in the Workplace

Debbie Dickson

by Deborah Dickson, CPA, CFF, MAFF

As printed in the Orange County Business Journal, “General Counsel Awards” special supplement, October 14, 2019.

Most employers never would expect that a trusted employee might commit fraud, yet every year numerous businesses are forced into bankruptcy due to fraud.  Even when it isn’t that extreme, the Association of Certified Fraud Examiners’ (ACFE) 2018 Global Fraud Study revealed that the typical organization loses a median of 5% of revenues each year due to fraud.

The Fraud Triangle

Employers can utilize the “fraud triangle” to monitor and identify factors in the lives of key personnel that can lead to fraud.  The fraud triangle is a model for explaining the factors that cause someone to commit occupational fraud. It consists of three components which, together, lead to fraudulent behavior: pressure, perceived opportunity and rationalization.

Pressure originates from a financial problem (personal or professional) that the individual is unable to solve through legitimate means, so he may consider stealing cash or falsifying a financial statement.  Next comes opportunity, using a position of trust to solve the financial problem with a low risk of getting caught. It is worth noting that many white collar crimes are committed to maintain social status and pay for lavish lifestyles. The final step is rationalization – fraudsters typically do not see themselves as criminals, instead feeling that they are caught in a bad set of circumstances.  They may even justify it by thinking that the employer underpaid them or is dishonest and deserved it.

Forensic Accounting Support

Forensic accounting engagements can be specifically tailored to discover fraud and sometimes even to prevent it. Attorneys engage forensic accountants to determine whether fraud occurred, estimate the extent of monetary loss, and uncover who committed the fraud.  When litigation is selected as a means to recover losses, forensic accountants prepare reports on the damages and render expert testimony. At Smith Dickson, our forensic accounting specialists have logged thousands of hours of forensic accounting, deposition and trial experience, both as expert witnesses and consultants in matters ranging from economic damages to fraud and embezzlement.  Smith Dickson’s forensic accounting specialists will support your case with the highest level of expertise available.

Deborah Dickson, CPA, CFF, MAFF is President of Smith Dickson, An Accountancy Corporation (www.smithdickson.com) based in Irvine.  The firm’s Litigation Support Services include: damage calculations; lost profits; forensic accounting; expert testimony; intellectual property; fraud & embezzlement; real estate; trust & estate beneficiary disputes, tax controversy; business dissolution. Ph. 949.553.1020.

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