Following are financial reporting red flags worth consideration
- Complex business arrangements not well understood and appearing to serve little practical purpose.
- Large last-minute transactions that result in significant revenues in quarterly or annual reports.
- Changes in auditors over accounting or auditing disagreements (i.e., the new auditors agree with manage and the old auditors do not).
Many studies conducted over the years have found that the most common vehicle for financial reporting fraud has been improper revenue recognition – although in a minority of periods this has been exceeded by manipulation of so-called “cookie jar” reserves, which are bogus estimated obligations that can be opportunistically reversed to compensate for earnings shortfalls. Revenue recognition abuses include both the deliberate mis-timing of recognition of otherwise-valid revenue, and the outright fabrication of revenue that does not deserve recognition at all. There are several reasons why improper revenue recognition has proven to be the easiest route to perpetration of financial reporting fraud.....
This section provides information on various international repute forensic account/audit resources
It is widely accepted that third party risks can and should be mitigated. This is usually achieved through an attempt to put in place a system of contracts and procedures whereby intermediaries are required to read through company policies, and represent that they will abide by anti-bribery laws as well as corporate ethical and legal commitments. Add to this a standard background check, and it might appear that you are ‘good to go...
This section is collection of some of the articles on forensic account.
Chargeback Insurance is a policy that protects acquirers, Independent Sales Organizations (ISOs) and others who may underwrite or sell merchant accounts. If a merchant they underwrite turns out to be fraudulent or goes out of business leaving a lot of chargeback claims unanswered and not enough funds to cover the losses, than the Chargeback Insurance policy covers these losses on behalf of the acquirer or ISO
As the global eCommerce market continues to grow, eCommerce fraud will follow the same trend. Unfortunately, almost all eCommerce merchants have experienced the pain of fraudulent chargebacks....
The Fraud Practice provides the Fraud Library as a free information resource to merchants and risk professionals around the world. We have attempted to keep information in the library non-vendor specific while providing sources for each of the techniques in the library...
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