Things to Consider when Choosing a Fraud Examination Firm

Fraud and risk management are of significant importance for companies in today’s global marketplace. Many companies  (UAE-based and international) are losing a part of their annual revenues every year due to these risks and frauds being committed.

First, let us understand what fraud is.

What is Fraud?

So, what is considered fraud? Fraud is a deceptive and illegal action intended for personal gain. This gain can either be monetary or non-monetary. Fraud comes in all forms, like payroll frauds, skimming, embezzlement, and expense report fraud. A significant number of entities, ranging from small businesses to large corporations have experienced fraud at least once in their companies, in some or the other way, leading to a decrease in gross revenue every year.

There are a few commonly known frauds that can happen in an establishment. They are as follows:

• Identity Theft

When people get a hold of your personal information which is sensitive in nature, it can result in you losing a fortune. It is advisable to keep such confidential information safe, away from potential fraudsters.  

• Payroll Fraud

Payroll Fraud can happen in a company in many ways. It can start from falsifying evidence of attendance and can range up to employees asking for salary advances and after getting leaving the company. Usually, a group of employees work together to achieve this fraudulent act. To prevent any such happening, the management should take strict measures and should also make the employee's sign contracts.

• Return Fraud

Usually, businesses that sell goods are the victims of this type of fraud. Fraudsters can do this kind of fraud in many ways. Ranging from stealing from the company and returning the products for monetary gains, to purchasing the product, using it for a while, and then returning it even if it has no defect. It is advised to have receipts for your business and ensure there are no loopholes that fraudsters can abuse for their gains.

• Money Fraud

Fraudsters can perform this fraud in many ways. Ranging from faking bills for certain payments made which causes damage to the company. The fraud is found out only after when the customer tried to deposit money in a bank. Hence, it is imperative that people who handle your company’s money first-hand know the difference between fake and real transactions and notes.

• Financial Statement Fraud

Adding or omitting data from financial statements of the organisation on purpose so that the potential, as well as current investors, can see that the company has a lot of potentials and is making a lot of profit when it is in fact, it is a false statement. This can hurt the company financially and can even result in the liquidation of the company in the long run.

Who is a Fraud Examiner?

Before we get deep into the technicalities and discuss the things to consider while choosing a Fraud Examination Firm, let us know who a Fraud Examiner is.

Fraud Examiner is a highly qualified certified professional who investigates civil and criminal fraud cases.

A certified Fraud Examiner uses their knowledge of multifaceted financial transactions with their understanding of the techniques, laws, and ways to resolve fraud allegations. They have a clear understanding of how and why fraud occurs. A certified Fraud Examiner has particular jobs and needs to have specific qualifications and career outlook.

What does a Fraud Examiner do?

A certified Fraud Examiner essentially has three primary roles.

1. Identifying evidence of fraud 
2. Conducting interviews and writing reports
3. Proactively evaluating the fraud risk of a business or organization

A Fraud Examiner identifies and gathers the evidence of the fraud incidents to form a case, like financial relationships, billing trends, and financial data. The Examiner interviews and documents statements from witnesses to include in the report. More often than not, the Examiner testifies their findings in fraud allegation cases to resolve the issues faced.

A Fraud Examiner usually works with law enforcement officers and attorneys, and assists in the arrest of the individuals charged with fraud. Many certified Examiners help organizations in organizing fraud detection and prevention efforts. They may design, apply, and maintain fraud detection procedures and tools; a few also train others in fraud detection and prevention methods.

Why do you need a Certified Fraud Examiner?

Forensic accounting has become rampant in Dubai, as it is an essential thing in any business. There are many situations where the need for a forensic auditor becomes vital. You may need to look into the company’s books and be vigilant for signs of fraud while buying a company. Make sure you are neither paying more nor buying a problematic establishment.

What to look for while Choosing a Fraud Examination Firm?

In the UAE, every company needs a certified and professional Fraud Examiner. Your company needs to have a professional accountant who understands and specializes in how to handle intricate work for your forensic audit needs.

• The Forensic Accountant needs to be able to carry out a complicated process of tracking how money relocates and finding out the loopholes and misstatements in the company’s financial documents.
• The Examiner has to have an understanding of how much is at stake when a fraud examination is needed. Make sure they have experience enough to discover any issues with your financial transactions.
• To not put your company’s finances at risk, get your forensic audit done by professionals who are trustworthy and knowledgeable in corporate fraud and accounting fraud.
• Make sure the Examiner or Examination firm you are choosing has a good reputation that is ranked based on their abilities.
• Also make sure the communications between your company, employees and the accountants you have hired have a seamless flow of the needed financial information.
• The Examiner must have explicit knowledge about the various types of fraud that can occur in a company, ways to find them out, and ways to prevent them.

Now, you have a clear idea about Fraud Examination and the things to consider while choosing a Fraud Examination Firm for your company’s financial needs. For such a reliable and convincing service in the UAE region, have a word with our experts at Jaxa Chartered Accountants. We would be happy to assist you with your company’s other accounting, taxation, bookkeeping and VAT related service needs. For further information, queries or assistance contact us.