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Little things mean a lot

Member: Nifa

A payroll administrator has just been jailed for four years after a routine audit uncovered a ‘small accounting discrepancy’, which then led to the discovery that the man had defrauded his company of £2.9m over several years.  The employee, who had access to the payment processes of all the workers on the recruitment firm’s books, invented fake companies and temporary staff to transfer funds through more than 20 invented bank accounts.

Later on, one of his colleagues discovered the scam but, rather than telling their employer, demanded a cut of the action for his silence. He too was jailed for four years when the case finally came to court this week.  Sentencing the pair, the judge said that the fraud, which had been going on for six years, would no doubt have continued for years but for the audit, which effectively saved the recruitment firm a huge amount of money without their even knowing about it.

Stories like these underline the importance of forensic audits, as these pick up on the slightest anomaly in the accounts. Having found this tiny thread, the forensic accountants will follow it back to its source and will go down every path it takes them until they discover the extent of the wrongdoing.  A forensic audit can also give employers peace of mind, as if nothing is discovered, then it means that there is nothing going on; the systems used by forensic accountants and the expertise they possess mean that they will discover the smallest of pointers that could suggest a fraud is being perpetrated.

Moreover, if there is a case to be answered, other forensic accountants will follow the money trail to find out what the criminal has done with it so that this can be used in evidence.

Author: Roger Isaacs, 11 Sept 2014

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