The Shift to Teleworking: Protecting Your Business Data from Fraud | Kelly Todd

The mass exodus of employees from traditional offices in the wake of the COVID-19 pandemic and the growing ease with which information can be moved and shared has made one thing clear: Businesses are facing a risk-filled new frontier when it comes to their data security. The rapid shift to telework has only expanded the […]

Accountant Malpractice Claims Are Likely to Rise. Are You Prepared? | Ralph Q. Summerford

CPAs, especially those in smaller accounting practices, usually have close relationships with their clients—and rightfully so. After all, who else is better positioned to understand clients’ finances and businesses than their trusted accountants? That is until they suffer a financial fraud scheme that a CPA has failed to uncover. Then, what I call the “client […]

Worried About Workplace Fraud? Pay Attention to These Employee Behaviors | Ralph Q. Summerford

Economic turmoil can serve as a powerful accelerant for employee fraud, pressuring cash-strapped companies to sacrifice compliance activities to save money and fueling financial insecurity and temptation among workers.

Eight Tips for Detecting Fraud in Accounts Payable | Lindsay H. Gill

According to the Association of Certified Fraud Examiners 2018 Report to the Nations, fraudulent disbursement schemes remain the costliest form of asset misappropriation fraud to threaten small businesses. Although this risk can seem overwhelming, it may be avoidable through taking proactive steps against fraud within your company. Here are eight tips to help you expose […]

Brilliance v. Ethics – Which One Wins? | Ralph Q. Summerford

Originally published by ACFE Insights. Smart people commit fraud every day. A recent case gives us a prime example. A federal judge asked Donald Watkins, Sr. to step away from the jury box as Watkins, Sr. made an impassioned plea in his closing argument. Watkins, Sr. was in the personal space of front-row jurors, who were […]

Auditors Who Stole the Exam Are Convicted of Fraud | Ralph Q. Summerford

This failure of duty matters – it violates public trust and costs innocent people their jobs, their pensions and above all – faith in a system. The Wall Street Journal reported on March 11, 2019 that David Middendorf, the former national managing partner for audit quality and professional practice at KPMG, and co-defendant, Jeffrey Wada, […]

Cash Flow and Fraud Go Hand-in-Hand | Leslie P. Littrell

Imagine working at a company for a period of time, checking your bank account and realizing that no paycheck had been deposited in exchange for your work. This scenario would undoubtedly raise red flags. Similarly, cash flow analysis performed by lenders and auditors that reveals stagnant or negative cash flow can also serve as a […]

Big 4 CPA Firm Knew in Advance Which Audits Would Be Inspected by Government Watchdogs | Ralph Q. Summerford

This is violation of trust, and it matters! Auditors must design their audits to look for fraud, and failure to do so may cause massive losses for stakeholders, investors, creditors and retirees. Neglecting to detect fraud can be truly life-altering — especially for retirees. While teaching a business ethics class in Jackson, Mississippi, I was […]

Capital Expenditures, Depreciation and Amortization in a Cash Flow Forecast and the Impact of the New Tax Law | Kelly Schmid

The US Tax Cuts and Jobs Act (“TCJA”) passed by Congress on December 20, 2017, will impact forecasts of a company’s cash flow and thereby will likely impact the valuation of a company. One of the forecast elements impacted is the forecast of capital expenditures, depreciation and amortization. The lowering of the C Corporation income […]

The Power (and Variety) of Data in Forensic Investigations | Lindsay H. Gill

Time and time again, we trumpet the incredible value of advanced data analytics in forensic investigations – often, it is the key to finding the needle in the haystack. Fortunately, our firm remains at the forefront of utilizing data to identify unexpected patterns when investigating financial fraud – that red flag that tells us something isn’t as it should be – whether for a qui tam case involving kickback schemes or a case of underreported revenue.

How Attorneys Can Effectively Utilize a CPA in Litigation | Lisa G. Miller

The right expert selected to compute economic damages is a critical ingredient to help an attorney’s case involving economic damages. As CPAs, we are asked to provide independent, objective opinions and/or consult on issues in a case.

Detecting Deception: Gathering Evidence and Seeking Admission | Kelly J. Todd

OPEN is a key word to remember when detecting deception. Open body language – and an open mind – are your best friends when looking for the truth. An open mind is going to help keep you in the “information-gathering” mode, which usually proves to be more effective than the gruff interrogation techniques you’ve seen […]

Detecting Deception: Facial Expressions | Kelly J. Todd

THE FACIAL FAUX PAS Now that you have gathered your intel – you have your subject’s baseline squared away and you’ve peeked behind their words – it’s time to focus on the facial faux pas. There are many facial signs that are likely indicators of deceptive hot spots. When your subject’s expressions and gestures don’t […]

Detecting Deception: Speech and Voice as a Lie Detector | Kelly Todd

Once we’ve established the baseline, it’s time to drill down to expose the meaning behind the words. While body language has long been the focus of detecting deception, research has shown that the analysis of a person’s speech may be much more accurate than merely observing non-verbal behavior. No matter the lie, there will always […]

Detecting Deception: Common Myths | Kelly J. Todd

THE MASTER OF DECEPTION Bernie Madoff infamously stole $65 billion reflecting 4,900 client accounts in a Ponzi scheme. All told, his investors lost approximately $20 billion of real principal. How was he able to look hundreds of people in the eye without arousing suspicion, all the while knowing he was robbing them blind? This man […]

Active Passive Appreciation – Active Efforts of Individuals | William C. Dameworth

As discussed previously, once it has been determined that a separate business interest appreciated in value during a marriage, learned treatises and case law often delineate the active passive analysis into the following elements: Identifying and quantifying market forces that caused the separate property appreciation. Identifying and quantifying the separate property appreciation caused by the […]

Active Passive Appreciation – Market Forces | William C. Dameworth

As discussed previously, once it has been determined that a separate business interest appreciated in value during a marriage, learned treatises and case law often delineate the active passive analysis into the following elements: Identifying and quantifying market forces that caused the separate property appreciation. Identifying and quantifying the separate property appreciation caused by the […]

Active Passive Appreciation – Causation | William C. Dameworth

The business appraiser performing an active passive appreciation analysis looks to their engaging legal counsel to define and interpret state law in the particular jurisdiction. An active passive analysis is performed when state divorce law requires a determination of whether, and under what circumstances, appreciation in otherwise separate property is classified as a divisible marital […]

Working Capital Changes in a Free Cash Flow Forecast– Part III | Kelly Schmid

Part II of my working capital blog identified methods often used by business appraisers when forecasting working capital. In this installment, I will present some additional thoughts regarding this topic. Depending on the facts and circumstances, it is typically appropriate to consider the company’s historical working capital ratios and industry working capital metrics at the composite level (e.g. total working capital), as well as each separate component of working capital (e.g. accounts receivable, inventory, accounts payable, etc.).

Working Capital Changes in a Free Cash Flow Forecast– Part II | Kelly Schmid

Part I of my working capital related blog addressed the impact on free cash flow of changes in current assets and changes in current liabilities, which are the two components that comprise working capital (calculated as current assets minus current liabilities). The combined impact of changes in current assets and changes in current liabilities equals the impact of changes in working capital on free cash flow. Part II of this blog identifies methods often used by business appraisers when forecasting working capital.