Link, Murrel & Company provides forensic accounting expertise with respect to litigation and bankruptcy services. Forensic accounting is closely associated with the performance of fraud investigations. Professionals performing these services are frequently engaged as expert consultants or expert witnesses. Mr. Crouch's designation, as a Certified Fraud Examiner, in the case of anticipated litigation and other adversarial actions is especially valuable.
Fraud encompasses transactions in which property is absorbed with deception describing behavior, which constitutes both criminal and a civil tort. Criminal fraud arises from a violation of state or federal statutes. Federal statutes are generally utilized to prosecute larger and more serious criminal frauds. Prosecution under federal statutes, however, necessitates specific requirements must be satisfied to achieve the described level of success in the courtroom.
While an auditor of financial statements designs an audit to provide reasonable assurance of detecting material fraud, fraud detection is not the primary objective of a financial statement audit. When fraud is suspected, companies may engage a specialized professional to apply procedures specifically directed at establishing whether such fraud did occur and, if so, its nature and extent. Two basic types of fraud include management fraud, generally referring to fraudulent financial reporting undertaken to distort financial statement information, and employee fraud, which focuses on the possible misappropriations of assets, or defalcations.
Common types of fraud include:
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Cash fraud
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Diversion of cash receipts
Petty cash thefts
Fictitious sales returns and allowances
Inventory fraud
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Inventory theft
Scrapping and then privately selling good inventory
Using inventory accounts to conceal other fraud
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Phony purchases
Diversion of purchases
Use of bogus middlemen to inflate prices
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Phantom employees
Fictitious hours or overtime
False expense reports