Fraud is the cornerstone of white collar crime. Plainly stated, it is a perversion of the truth, with concealment, for one’s own gain or advantage.
Although white collar crime is often disguised as a legitimate business failure, it is intentional and as criminal as a coldly calculated bank robbery. Every facet is carefully planned and “camouflaged” by complex transactions and financial records, engineered to avoid detections by anticipating each counter measure or control procedure.
Therefore detecting fraud requires a unique blend of auditing and investigative skills. But investigators often lack the necessary auditing expertise to analyze complex transactions and financial records. And auditors typically do not have the investigative skills, such as interviewing, required to establish intent.
Forensic accounting, on the other hand, bridges the gap between auditing and investigative disciplines and provides the necessary resources to effectively handle fraud. It questions why a representation is made or a transaction occurs, which is crucial for establishing intent, a key factor in determining fraud.
To learn more about fraud and forensic accounting, view the Weaver Risks Insights document, Fraud vs. The Auditor: “No Contest.” For a discussion specific to your organization, please contact us.