Larry’s Laws of Larceny- Law 7: The Petty Thief Always Gets Greedy

Larry Beebe, CPA

Most people who steal money start with small amounts. They rationalize by saying that they are only borrowing the money and they intend to pay it back. When they aren’t caught they rationalize that the entity they are stealing from didn’t even miss the money so it is okay to take more. They often think that, after all, they are entitled to the money either because they are underpaid or for other reasons.

In one situation a CPA […]

October 6, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 6: You Can’t Always Tell a Phony Document by its Looks

Larry Beebe, CPA

When is a check real and when is it a phony? Sophisticated copying and printing techniques can create fake documents that can fool the experts.

A plan employee, check in hand, goes inside a liquor store to cash his paycheck. A man outside the store offers him $100 to “borrow” his paycheck. Within minutes the crook has a perfect duplicate of the check. On Saturday morning the crooks, armed with phony copies of the checks, attempt to cash […]

September 29, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 5: Kiting Isn’t a Windy March Pastime

Larry Beebe, CPA

Kiting, or check kiting, is a scheme where a person deposits checks back and forth between banks. The fraudster steals and covers up the theft by continuing to deposit checks back and forth between accounts. The amount of the checks deposited is often so large that the amount stolen appears small in comparison. In one recent case the checks deposited back and forth totaled $114 million to cover a theft of approximately $1.6 million.

To prevent kiting the […]

September 22, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 4: Lapping has Nothing to do With the Daytona 500

Larry Beebe, CPA

Lapping is a fraudulent scheme which allows an individual to steal cash from an organization. It can occur in at least two ways in a multi-employer benefit plan.

One way involves a theft of employer contributions. An employee of the benefit plan steals an incoming employer contribution, converts it to cash, and steals the cash. The thief covers up by crediting the employer’s account with the next employer’s payment. The thief then steals again and covers up in […]

September 15, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 3: Double Entry Bookkeeping Doesn’t Produce a Double set of Books

Larry Beebe, CPA

This statement is a play on words. Double entry bookkeeping is the type of accounting used in the business world by everyone.

A double set of books has nothing to do with double entry bookkeeping. An entity would have two sets of books to avoid paying taxes or for some other criminal purpose. In an employee benefit plan, the second set of books might be used to avoid the obligations called for by the collective bargaining agreement signed […]

September 8, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s laws of Larceny- Law 2: The Auditor Can’t Find What Isn’t on the Books

Larry Beebe, CPA

I often read stories in the newspaper about funds being stolen or misused. Often there is an outcry from the newspapers or a politician stating, “Why didn’t the auditors catch the fraud?” Sometimes the answer to the question is the auditor has no way of detecting the fraud because the fraudulent transactions were not on the books.

A large pension plan hired a new investment manager. In order to get the account the investment manager hired a relative […]

August 25, 2015 Accounting, Audit, Forensic Accounting Read more...

Larry’s Laws of Larceny- Law 1: If Often Starts with Credit Card Charges

Larry Beebe, CPA

As auditor’s, we have found that most theft or embezzlement (defined as the misappropriations of funds placed in one’s trust or belonging to one’s employer) starts with small amounts. The thief steals a small amount, is successful, and that often leads to larger amounts being stolen.

A place that many thieves start is with credit card charges. They turn in phoney bills or receipts and get away with it. With success their confidence grows and they look for […]

August 18, 2015 Accounting, Audit, Forensic Accounting Read more...

AUDIT COMMITTEE: QUESTIONS TO ASK YOUR AUDITOR, PART 7

Posting by John Merchant

If you have been appointed to an Audit Committee, you may be wondering what information the auditors will normally provide and what questions you should ask.

There are certain “required communications” that an auditor should routinely provide to the Audit Committee as part of an audit conducted in accordance with generally accepted auditing standards (GAAS).  These communications were established in Statement on Auditing Standards No. 114. In addition to these required communications, there are questions that you […]

April 8, 2015 Audit Read more...

AUDIT COMMITTEE: QUESTIONS TO ASK YOUR AUDITOR, PART 6

Posting by John Merchant

If you have been appointed to an Audit Committee, you may be wondering what information the auditors will normally provide and what questions you should ask.

There are certain “required communications” that an auditor should routinely provide to the Audit Committee as part of an audit conducted in accordance with generally accepted auditing standards (GAAS). These communications were established in Statement on Auditing Standards No. 114. In addition to these required communications, there are questions that you […]

April 1, 2015 Audit Read more...

AUDIT COMMITTEE: QUESTIONS TO ASK YOUR AUDITOR, PART 5

Posting by John Merchant

If you have been appointed to an Audit Committee, you may be wondering what information the auditors will normally provide and what questions you should ask.

There are certain “required communications” that an auditor should routinely provide to the Audit Committee as part of an audit conducted in accordance with generally accepted auditing standards (GAAS). These communications were established in Statement on Auditing Standards No. 114. In addition to these required communications, there are questions that you […]

March 23, 2015 Audit Read more...