Our July 13th show featured a segment from Bill Nelson who is a CPA with Piercy Bowler Taylor & Kern and also an instructor at the College of Southern Nevada. Bill shared a wealth of knowledge about fraud and emphasized how prevalent fraud is in today’s world and that while the dishonest will remain dishonest, the goal with his clients is to protect them and help keep the honest people, honest.
One of the important things that Bill pointed out for business owners is to carefully track cash both on hand in the bank through the use of reconciliations. He also suggested that retail establishments use cash registers that provide receipts for every sale and can also be reconciled with the internal mechanisms tracking the transactions.
An important component to the CPA services is to audit and evaluate the books of any business and owner employing those services. In fact, it’s a requirement of the standards of practice that Bill and his firm audit and test the controls. Bill pointed out that owners become comfortable with their employees and sometimes the last person you would expect to commit fraud surprises you. Bill cited one of his first cases of fraud where the employee who was viewed by the owners as the grandmotherly type, was well loved and frequently baked them cookies actually stole over $100,000! Talk about expensive cookies!!
Bill also shared that based on an international study, the median fraud is $145,000. This money is easily hidden and typically taken over time. Bill talked about how the fraud usually starts with the mentality of “I’m just going to borrow a few dollars. I just need this cash this weekend. I’ll pay it back on Monday” but then Monday rolls around and they don’t have the money and no one really noticed so some the end of the week, they take a little more. Shelley added that sometimes the fraud starts because the employees think they are not paid enough or the company is too profitable which Bill agreed are other mentalities that lead to fraud in the workplace.
The bottom line is that fraud can happen to any owner and any business regardless of who your employees are or how long they’ve worked for you and every business owner should had the checks and balances in place to protect themselves. We really appreciate Bill Nelson joining us on air and sharing this great information and he will be happy to help any business owners needing his services.
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