Computer files are often very valuable to a fraud investigation. This simple procedure will allow an investigator to see hidden folders and files:
When thinking about investigating fraud, how many times have you heard the phrase “Follow the money”? Although many fraudsters steal money, all fraudsters steal value! If you begin an investigation thinking about cash, you are too myopic in your approach.
Many businesses have significant value in their raw materials and finished goods inventories, but there is so much more. What about customer lists, credit card information, intellectual property (IP), and even scrap or fully depreciated assets? Oh, there is so much for the taking.
Also remember that different countries and cultures can attach greater value to things we take for granted. This can especially come into play in FCPA situations. In many third world countries the necessities of life such as toilet paper, tooth paste, and sunscreen could be an effective bribe.
Come on people, lets get creative out there! The fraudsters certainly are.
I was called in on a fraud audit for a small college. They had just changed auditors (after 25 years), and the new senior accountant on the engagement asked the CFO to explain a transaction. When he went back to his cubicle, the senior couldn’t make sense of the explanation, and went back to ask again. He took careful notes this time, but afterwards still couldn’t understand the business sense of the transaction. When he returned to the CFO the third time, the CFO confessed that he had been ripping off the company for years — this was apparently the first time an auditor had even looked at these transactions.
Moral of the story — if you don’t understand the explanation, that does not necessarily mean that you are stupid. Keep asking until you can prove it one way or another.
Posted by Bill Black
Lets face it, nobody likes to visit the dentist. I went this week, perfect checkup, but I still had that trepidation as I entered the office. If everybody dreads dental visits, why are there so many dentists? and Why are they so busy, especially in a recession?
I think the answer to this lies in the fact that avoiding the dentist for long periods of time will result in problems. We all know this to be true. Some will avoid dental problems for long periods, others will have serious problems in a relatively short period of time. However, if you never go to the dentist, you will almost certainly encounter a dental problem sometime in your lifetime.
The same can be said for internal controls. If you never implement controls or monitor them, your business will most certainly encounter a problem. The larger the business and the more employees, the quicker the problem will occur. Like tooth decay, business problems can occur in both good and bad economic times.
Remember that “just cleaned feeling” when you leave the dentist office? That lingering taste of spearmint and slightly gritty feeling in your molars? Didn’t you feel better knowing that a cavity was discovered right before it grew into a major problem?
Why not have that same confidence with respect to your business? Have someone creative with a fresh set of eyes look at your procedures. Find a major issue before it becomes a problem. It could be that everything is humming right along, and you have that “perfect opinion” feeling as your controls tester walks out the door.
If you have been dealing with an Ike claim, you are probably familiar with “we need more information before we can process your claim” letters you have received. The reason for an insurance company to delay your claim is very straightforward and simple, the time value of money. The longer the insurance company holds your money, the more return they can earn on it. If the claim extends beyond the statute of limitations, it may not be paid.
If your claim has not been settled, you MUST file a lawsuit by September 13th 2010 to extend the statute of limitations in the state of Texas. If your claim has not been settled by this date and you have not filed suit to extend the statute of limitations, it probably will not be paid.
So you are taking the plunge, purchasing that company with the great international business that you have had your eye on for a while. Just make sure you do not overpay!
Why should FCPA compliance be added to your due diligence? Actually a couple of reasons:
The UK Bribery Act 2010 was enacted April 9th of this month and it is a monster! This act prohibits bribery of private individuals, private companies, as well as foreign officials.
This act includes and offense of “corporate failure to prevent bribery” which means that corporations will be liable for the actions of anyone acting on its behalf… employees, partners, and agents.
No facilitation payments allowed!
Statutory defense of adequate procedures is included. What are these adequate procedures? Compliance program? Possibly compliance monitoring?
A company may be prosecuted if it has operations in the UK, even if the offense took place in other countries unrelated to the operations in the UK.
Directors and officers will be held personally and criminally liable.
Fines are unlimited. This can be a real money maker for cash strapped governments!
Most people’s understanding of the FCPA is that it makes it illegal to bribe foreign officials. Although this is a simplified understanding of the statute, it is a correct interpretation. But why? Why does our government think bribing foreign officials is so wrong?
The explanation I read several years ago that makes the most sense to me argues from a point of resource allocation. When foreigners are allowed to funnel money to directly to government officials, their decisions can be influenced to favor the foreigners. This foreign influence can change the way resources are allocated in countries that have few resources to allocate.
The FCPA statute which makes it illegal for Americans to use money or other items of value to influence foreign officials decisions regarding the allocation of their country’s resources, helps to ensure that those allocation decisions are left solely to the citizens and leaders of those countries without American economic influence.
