Deep in the heart of a steaming jungle, a ramshackle mining town is full of dangers like mudslides, snakebites, and tropical diseases. Even getting here is an adventure that requires a small plane, a day spent navigating seething rivers, or a hair-raising 4x4 ride over ungraded roads. There are few comforts here and, apart from items in a small camp commissary, almost nothing to buy.
It may seem the most unlikely place on earth to uncover an elaborate fraud scheme. But as Mary Breslin, CIA, CFE, discovered, “The accounting team had this fantastic, controlled, double sign-off process for the miners’ cash. It was placed in envelopes, which were actually sealed with wax, and then hand-delivered to each person, who had to count and sign for it.” Just one problem — the same payroll agent who prepared the miners’ checks was also entrusted with making the bank run to withdraw their cash. It was easy enough to add extra money to each check, pick up the cash, and pocket the difference.
Upon further investigation, Breslin unmasked the same employee as the culprit in a massive, years-long payroll fraud. “It looked like there was this great process,” says Breslin, today an independent audit trainer and consultant. “But they never reconciled the pay register to the actual take-home pay of the miners, and they never reconciled their pay register to their HR roster. If they had done any of those things even one time, they would have found ghost employees who had been there for years.”
No business professional thinks they’re an easy mark. Yet thousands of fraudsters roam today’s organizations, and they’re making off with millions of dollars each year. These conniving crooks are relentless in exploiting our complacency, coming up with inspired twists on the same old cons. Leonard Vona, CPA, CFE, of Fraud Auditing Inc., spells it out: “A lot of fraud scenarios are common to all businesses. The fundamental schemes of 30 years ago are the same schemes occurring today.”
If the schemes are so well known, why do they keep happening? “For decades, the profession has been talking about fraud data analytics as one of the key skills required for auditors,” Vona explains. “Years later, we’re still talking about it.” According to Vona, too many audit teams begin and end their war on fraud by purchasing a detection tool. “We’re comfortable as a profession with compliance and internal controls. But combating fraud is a different animal. It begins with understanding the specifics of your business systems and the scenarios that make you vulnerable to fraud.”
The next step is to build an audit program to search for these scenarios. To help you get started, here are three classic fraud scenarios, along with some savvy approaches to fraud data that real-world CPAs and fraud professionals are using to protect their organizations.
Scenario #1: fictitious employees
Ghost employees may be entirely fictitious, or they may be former employees or contractors who were never purged from the system. As Breslin discovered at the mining company, “The payroll manager had added 19 fictitious employees, in addition to pocketing the extra payday cash. And because there’d been a change in computer systems, we could only go back three years. We’ll never know how long he had been doing it.”
Breslin trains Fortune 500 accountants and auditors on how to combat fraud. “I can’t tell you how many times someone comes back and tells me that they zeroed in on fictitious employees and immediately found fraud. It happens every time. This scheme is very common, yet most organizations don’t look for it.”
“It sounds simple,” Vona concedes. “But the methodology for fraud risk identification is missing from most of the literature. Most auditors need help in paring down a list of fraud scenarios that exist in the business systems they’re auditing.” It helps to break the scenario into its components:
WHO is committing the fraud? (in this case, the payroll function)
WHAT type of entity is involved? (in this case, fake employees)
WHEN and WHERE does the fraud transaction take place? (in this case, the pay register)
HOW can an audit step be added? (in this case, what specific tests will find employees who don’t actually exist?)
In other words, take heart—fraud detection doesn’t have to be complicated! After all, real employees do real things—they take vacation and sick time, sign up for benefits for their spouses or children, have their wages garnished for child support, and participate in employee charitable campaigns. They scan their badges in and out, punch time clocks, and log in and out of their computers.
Ghost employees don’t do any of those things. They just get paid like clockwork, with the money being deposited right into the pocket of your friendly neighborhood payroll fraudster. “The details of the ghost employee fraud will vary from one organization to the next,” Breslin says. “Each company has a different culture, with different processes and different systems. The key to uncovering this scheme is looking for what’s not there.”
Vona notes, “What the auditor does is look for patterns and frequencies. There’s no official rulebook on this. It’s somewhat dependent on what the perpetrator thinks they can get away with. With all that said, by working through your scenarios, you start to understand what fraud detection really looks like.”
Stay tuned for part II, which will examine fraud scenario #2: zombie vendors.
Liz Clare is a professional writer focusing on enterprise technology.
On October 10, 2010, Orlando's Amway Center, the nationally acclaimed new home of the Orlando Magic, opened 30 days ahead of schedule and within budget.
The complex 800,000 SF public/private venture also received LEED® Gold Certification – the first basketball venue in the nation to do so. The developer of this massive project, the Orlando Magic, retained SC Advisors as the Developer's Representative. We worked closely with the Orlando Magic through every detail of project funding approval, design, construction, occupancy, and closeout.
In addition to the design/build challenges inherent with a special use facility, our team successfully navigated the daily challenges of a high profile project with numerous public requirements including M/WBE commitments, neighborhood programs, direct public procurement, and owner's insurance programs.
At the same time, we effectively balanced the requirements of the City of Orlando as the owner and the Orlando Magic as the developer-at-risk and anchor tenant.
Proaxia Consultants: Apple and SAP, A smart partnership
We at Pro Axia Consultants Business Consulting Group in Osaka, Tokyo, Nagoya, Japan believes that this partnership could result in a lot of advanced and beneficial developments as well as improved business value in the near future. We are already expecting this to happen because it's certain that the combined user experiences of Apple and the end-to-end business process and software of SAP will be a game changer to our modern world.
We're not going to be surprised if there will come a time when companies and developers will make a big change in the digital world through this partnership. We can also see new doors to different opportunities and transformation in the mobile work experience of customers.
The world we live in today can be described to as an app-driven world because most of us can't live a day without using one or more apps on our phone or tablet, right? We understand that with this partnership, excellent business applications will be developed, along with opening potential for SAP and Apple joint customers.
SAP is developing lots of new and native iOS industry apps for core business processes to allow their customers to fully leverage the data in their SAP enterprise systems and to change how they run their business anywhere.
We understand that the kind of capability that drives a digital enterprise is being able to get mission critical information, reports, and data without being attached to your desktop. We found out that SAP is starting with industries that have a high demand for consumer applications such as retail, asset intensive industries, professional services, and healthcare.
SAP offers their communities of developers with innovative tools and training to build, extend and run a new class of native iOS applications made using the HANA Cloud Platform (HCP). Developers will get access to the power of HANA in the cloud.
You don't need to be a developer to change an existing SAP application because HCP enables you to do so. Through this partnership and HCP, the path to the best app just got even better. With SAP HCP SDK for iOS, along with training for developers to native iOS apps, companies and developers can quickly develop their own native apps for iPhone and iPAD while taking advantage of all the highly developed iOS technologies.
We also learned that this partnership will provide developers with a SAP Fiori for iOS design language based on SAP Fiori UX adapted for iOS, including reusable design components and building blocks to enhance the development of consistent and excellent UI design.
To connect millions of developers, customers, SI partners and ISV partners, SAP and Apple will jointly develop a SAP Academy for iOS to complement the SDK as well as curate and educate their combined ecosystem. We've been taught that it could be beneficial for both firms to share the knowledge of technical expertise and design skills for native iOS app development.
This collaboration will also make it easier to consume and leverage your organization’s most important data on their iPhone and iPad devices. To help customers constantly access their data each day and obtain crucial information, SAP will provide an enterprise computing platform through HANA.
Developing crucial apps for customers are the main objective of this partnership, which could allow newer and faster ways to perform a task, access data and do their job. Accessing accurate and real-time data is ground-breaking. Mobile apps on iOS will make digital transformation even more popular between enterprises.
We strongly believe that combining SAP's helpful data management with Apple's excellent user experience will really lead to state-of-the-art transformations. We are also excited at the same time because endless possibilities and benefits could come to our modern society.
Bacall Conniff and Associates Review: A Quick History of the Restaurant Business
Have you ever wondered how restaurants started? Well, we always assumed restaurants have been there all this time without realizing that the evolution of the business brought about a revolutionary effect on the family, industrialization and the whole economic system of the world.
What really happened? Let us take a quick trip back to the past when people practically did everything at home like for example in Singapore: planted their own food, raised animals for meat and even built their own homes, especially those who started out as pioneers in the wilderness places. Fast forward to the birth of the towns and cities when people had established formal education and also learned to specialize into various skills or enterprises to earn a living, instead of the old, barter-trade system. It was inevitable for people to eventually delegate the former home-based task of cooking food to a person or an enterprise that made good money doing so.
The restaurant was born out of that need not merely to save time but also to avoid the tediousness of preparing food day-in and day-out. And one could have various choices as to the menu, instead of the usual leftovers or the staple egg-and-bacon breakfast or mashed-potato-and-steak dinner. One could now order continental food, French cuisine or shish kebab. And have it delivered home as well!
With more and more people going into the business, the food choices became even more diverse. The simple beverage, coffee, drove the proliferation of chains of restaurants, generating a multi-billion business worldwide. And before that, of course, were the hamburger and the doughnut. The restaurant did not only change the economic texture of civilization but also the lifestyles of people in general. Many people today rarely cook at home and simply “take-out” on working days. And on weekends, the family would try out the newest food trips or just go on a gustatory adventure to neighboring cities and even foreign cities.
One adverse effect of the restaurant, particularly that brought about by the fast-food shops, is the degradation of the population’s health. Whereas people used to eat “healthy”, they were now eating “junk” – food catered to them by many commercial establishments whose main goal was to make money, no matter how devoid of nutrition their food was.
But restaurants are slowly wizening. With the growing wellness and fitness industry and the move to go “organic”, more and more restaurants now cater fresh alternatives in healthy diets. It seems restaurants are here to stay and will surely provide a lasting support to the ordinary individual’s penchant for good and appetizing food any time of day.
Bacall Conniff and Associates helps the restaurant industry remain a strong force in the world economy through providing excellent accounting and financial services.
Identify risk and protect your business by better understanding the companies you work with. Detailed risk analysis based on financial performance, Companies House data and negative events. Includes free updates and document access.
Private limited with Share Capital
Active - Accounts Filed
Private limited with Share Capital
18 November 2002
Nature of business (SIC)
5540 Bars -
Available to 31 Mar 2014. Next accounts due by 31 Dec 2015
Available to 18 Nov 2015.