Small Business Fraud & Audit Firms
September 22, 2014

Small Business Fraud & Audit Firms

audit firm

There is a significant number of employee fraud cases involving small businesses – usually moderately successful ones. These types of businesses entail a business owner living an above average lifestyle, who doesn’t realize the need to instate a structured accounting environment in their business’s layers of management or employment of an audit firm. A struggling small business can experience fraud as well, but it’s less likely due to its minimal assets and undivided attention to finances.

How Does Fraud Occur?

It typically starts with an entrepreneur forming a small business. These businesses derive from something they’re interested in and passionate about; In other terms it’s not about the money. Since money is not a priority and just a by-product of their success, the entrepreneur will delegate all the financial affairs to an employee with minimal or no oversight and pay no consideration to the need for an audit firm. Ultimately, the lack of priority leaves a single or multiple opportunities for a dishonest employee to take advantage of their lack of auditing or an audit firm’s oversight.

How Do You Prevent Fraud in Your Small Business?

Fraud can stunt the growth of a moderately successful small business, thereby prohibiting its ascension. However, if the business expands by avoiding fraud, through audit firms or other accounting means, it can successfully move to a safer zone. With a greater level of success, the business will need layers of management to operate efficiently and better segregate duties and oversight. These new layers of management and control are a big step toward preventing internal fraud.

What is Forensic Accounting?

Forensic accounting is a specialty practice area of accounting that depicts engagements that result from actual or anticipated disputes or litigation. Those that specialize in this area of accounting examine possible suspicions of fraudulent activity within a company. Audit firms are a powerful resource for providing forensic analyses of suspicious and hidden internal malpractices.

At Verdeja, De Armas & Trujillo, LLC we combine our audit firm and investigative knowledge with accounting skills to identify how fraud is perpetrated and to unravel complex matters. Ongoing training in fraud detection reinforces our extensive experience and helps us stay one step ahead of fraud perpetrators and ever-evolving fraud schemes. Our style of forensic accounting is a key factor in fraud prevention. Contact us today for a consultation!