Gettry Marcus CPA, P.C., a consulting, tax and forensic accounting firm, shares a Chief Financial Officer (CFO) fraud case study conducted by the firm.
A client requested an initial audit to satisfy bank requirements of a wholesale/distributor of office products. The experienced team at Gettry Marcus performed the required audit procedures, but as it does with all clients, Gettry Marcus looked beyond the required steps.
It was then that the team found some inconsistencies and unusual increases in certain balance sheet accounts. The first step for Gettry Marcus was to develop strong relationships with the owner and to obtain the trust of other key personnel. Then, with the firm's strong analytical procedures and review of certain invoices, Gettry Marcus uncovered an embezzlement of funds committed by the CFO.
The CFO admitted to stealing $100,000, but Gettry Marcus discovered the funds actually stolen to be five times that amount. After terminating the employee, the owner was able to recoup a significant amount of the funds lost. Finally, the firm assisted in interviewing and hiring the new CFO as well as implementing stronger internal controls to help prevent this or other improprieties from occurring in the future.
The full case study and others are available at the Gettry Marcus website.