Can Outsourcing Help Prevent Fraud?

Fraudulent behavior is in the news every day. I read on LinkedIn yesterday about a high-level executive who had a company credit card and used it for personal expenses. Not only did he use the company credit card for his personal expenses, but those of his escort. Combined personal expenses to the tune of $5.6 million dollars. My first thought was why wasn’t anyone looking at the credit card statements? Unfortunately, scenarios like this one occur every day. The ACFE (Association of Certified Fraud Examiners) estimates that all businesses lose a median of 5% of gross revenue to fraud each year.

When companies outsource their accounting needs to an independent professional a fresh set of eyes are reviewing all the transactions while working on your data. In this case the outsourced CFO/Accountant/Bookkeeper would automatically question the nature of these charges because they are obviously not of a business nature. Outsourced accounting professionals are not uncomfortable asking the difficult questions about abnormal transactions. We are independent and do not have the same level of uneasiness of making inquiries that an employee might of their superior. When an employee is told by their direct boss to disregard the questioned charge and record it to an expense account, what is this person to do? If they question their superior it may cost them their job. An outsourced accounting professional will not record the transaction in that manner and move on. It is their responsibility to report fraudulent behavior to top management. If it was your company, wouldn’t you want to know?

If you are interested in reading the article, click here.

By | 2017-09-05T17:43:53+00:00 August 4th, 2017|