PEOPLE. PRINCIPLES. POSSIBILITIES.

EideBailly SM
FORENSIC ACCOUNTING
& INVESTIGATIVE SERVICES
Managing Workplace Fraud
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Prevention
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Detection
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Investigation
Forensic Accounting
we listen
raudulent behavior in giant corporations is making headlines throughout the
country, but they are not the only ones that are susceptible to wrongdoings. A
recent study by the Association of Certied Fraud Examiners shows that busi-
nesses with less than 100 workers are actually more susceptible to accounting
fraud than large companies with more than 10,000 employees.
We hear questions from our clients like, Why do my books show a prot, but
I am loosing money? ... My controller has made some extravagant lifestyle
changes lately, should I be concerned? ... I want to see the nancial re-
cords, but no one can seem to nd them. Theses are red ags that should be
watched for in any company.
Three essential elements are common to all types of fraud schemes:
opportunity, pressure and rationalization. It is important for companiesof all
sizesto understand this fraud triangle. By understanding and managing these
components, you can reduce your companys risk of fraudulent behavior.
Experience the Eide Bailly Difference
Work with Certied Fraud Investigators, licensed Private Detectives and
Certied Public Accountants who have the investigative techniques and
technical skills needed to get to the bottom of the situation.
Benet from our proactive
approach to fraudulent behavior.
We can help your company
or organization develop and
implement a prevention program
to minimize your risk to fraud.
Gain insights from our industry
and service specialists. Eide Bailly
is a nationally recognized rm,
specializing in accounting, audit,
tax and consulting. Not only do
you have access to our forensic accounting and investigative services team,
but also to more than 800 professionals with specialized skills.
Enjoy the Eide Bailly experience, in which our people will serve you with
passion and integrity.
Fraud occurs in every type of business and in every size of business. We will
assign an experienced team to help you prevent and detect fraudulent activity
to minimize your risk/damages. When fraud has occurred, we are here to help
you investigate the situationand then help you move on.
f
T The Fraud Triangle
Opportunity: taking advantage
of ones employment responsibil-
ities to defraud their employer.
Pressure: if someone is under
pressure s/he is a greater risk
to your company. Pressures can
come from a variety of sources,
including lifestyle, personal debt
and business losses.
Rationalization: the individual
can justify the fraud by thinking,
They owe it to me, I deserve
to get paid more, Im only
borrowing the money, or Im
not hurting anyone.
you get results
Situation Solution Results
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A client in the service
industry was experiencing
unexplainable low margins.
This was unacceptable to
the client. He hired Eide
Baillys forensic team to help
him analyze the situation.
Our experienced forensic investigators
performed behavioral assessment inter-
views to determine each employees level
of fraud awareness. They also looked for
internal control deciencies and reasons
for low margins. We provided the cli-
ent with a complete report regarding the
ndings and our recommendations.
Two employees were proled as
deceptive during the interviewsdue
to their responses and behavioral
characteristics.
One employee, who confessed to
stealing, was red. The case was
turned over to local law enforcement;
we helped the client le an insurance
claim.
The client implemented our
recommendations for improved
internal controls over cash, resulting
in increased margins.
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A manufacturing company
was experiencing unusu-
ally high employee turnover,
which resulted in greater
recruiting and training costs.
The rm knew it must nd
ways to reduce its turnover to
control costs and to rebuild
an experienced team.
Eide Baillys forensic team analyzed the
companys employment history, and found a
pattern for short-time employees. We recom-
mended the company include an employ-
ment background screening on all prospec-
tive employeesa practice that has become
critical to all industries.
The rm formally added background
checks to its recruiting/hiring process.
The rm has reduced turnover by
40%, therefore, saving money by
reducing employee training costs.
The company is experiencing
higher productivity due to a more
experienced production line.
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A client was experiencing
an unexplainable decline in
prots. The Chief Financial
Ofcer was suspected of
embezzling corporate funds,
so the client hired Eide
Baillys forensic account-
ing and investigative team
to look into the situation.
We analyzed the companys nancial state-
ments and records and uncovered a large
fraud scheme. From available documents
and records, and from interviews with key
employees, we produced a fraud report that
revealed the CFOs fraudulent activities. The
primary suspect was interviewed and con-
fessed. We assisted the client in ling an em-
ployee dishonesty claim, and further assisted
law enforcement in the prosecution process.
Chief nancial ofcer gave a written
confession and was then red.
The case was turned over to law
enforcement and charges were led
by the local prosecutor.
New chief nancial ofcer was hired.
Company is experiencing increased
prots.
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A large recreational whole-
saler was experiencing
signicant inventory losses,
a high number of customer
complaints and a loss in reve-
nue in the warehouse depart-
ment. They decided to bring
in an independent team.
After meeting with the companys executives,
our team of forensic investigators deter-
mined the company needed to proceed
with some investigative work. We con-
ducted covert surveillance of the warehouse
department, onsite interviews of warehouse
employees, and analyzed the nancial
statements for key account anomalies.
Obtained key confessions from
the warehouse supervisor and two
warehouse employees.
Installed proper internal controls
designed to safeguard the assets of
the company.
Inventory variances have greatly
improved.
Proper controls are in place, giving
owners peace of mind.
The cost of a single investigation is insignicant compared to the cost of losing
and replacing an employee who has been on payroll for any length of time.
~ Angela Summers, Vice President - Operations
Summers Mfg Co., Inc.
Fraud Prevention
Background checks
Fraud Hotline
Review of internal controls and management
practices
Fraud program recommendations/implementation
Fraud awareness training
Fraud Detection
Detection of asset theft fraud
Detection of nancial statement fraud
Asset verication
Discovery of hidden assets
Professional negligence
Fraud Investigation
Asset theft investigations
Litigation support
Insurance support
Computer data recovery
Background Checks
Because resume fraud is on the rise, we recommend
you implement a company policy to conduct
background checks on all new hires. Deception
on resumes commonly entails falsifying education,
stretching dates to cover employment gaps,
increasing earned salaries, enhancing job titles,
embellishing job duties and achievements, and
inventing employers to satisfy your companys
needs or relevant laws. Background checks
can range from a basic informational report to a
comprehensive investigation.
Fraud Hotline
This program encourages and provides
anonymity to employees who call to report issues
affecting them, their co-workers or their company.
These issues include fraud embezzlement, theft of
trade secrets, sexual harassment, threats/harassment,
Internet offenders, discriminations, abuse of time/
equipment, tampering of data and pornography.
Our Fraud Hotline Program includes:
Access to the Fraud Hotline, 24 hours
a day, 7 days a week, answered by
a trained fraud investigator.
Educational posters to place within
your companys facilities.
Rev: 12/2005
Member of HLB International