Do you suspect — or know — that one or more employees may have embezzled funds from your business? The steps you take now are particularly important, not only to minimize financial losses but also to prevent future losses. And a forensic accountant can help. Why should you engage one whether or not you know what happened to your money? Here are three of the most important reasons.
1. To Build a Case
You may be able to recover some or all of the stolen funds if you can successfully build a legal case against the employee. But even if you know what they did, you'll have to go to extra lengths to show it through documentation and by drawing a straight line connecting them to the crime.
White collar, or financial, crimes are some of the most complex crimes and often require a great deal of investigation to uncover. Then, someone must explain them clearly and straightforwardly to a jury or others with limited financial knowledge. Forensic accountants are trained to do both elements in both criminal and civil law cases.
2. To Determine the Extent
Just because an employer knows that funds were stolen doesn't mean they know the whole story.
For instance, you may know that an accounts payable manager created one or more fake invoices through which to steal money for themselves, but do you know how long they've been doing it? Do you know for certain that no other invoices were involved? Do you know whether or not anyone else knew of or participated in the scheme?
You may need an accountant to perform an even more thorough check of all your books — possibly for many years — in order to ensure that you have a grasp on how much fraud occurred and can seek justice if needed.
3. To Prevent Future Crime
How did the employee(s) perpetrate their theft? Could your business have done anything to prevent it? Are there weaknesses in your bookkeeping, checks and balances, or internal auditing that were (and could be again) exploited? For example, the accounts payable manager above may be the only one to see and authorize invoices. In this case, adding a purchase order system or giving check authorization to a different staff member could prevent future fraud.
A forensic accountant is a trained accountant with experience not only instituting good GAAP standards but also identifying best practices. They'll analyze your processes to find strengths and weaknesses and improve things for the future.
Where to Learn More
Could a forensic accountant help your business recover from employee theft? The answer is probably yes. Start by learning more about their valuable services and how they can make your company stronger and more financially stable than ever. Contact a forensic accountant if you would like more information.