The fraud triangle is similar to a three-legged stool, the stool won’t stand if one leg is missing.  In order for fraud to take place, the perpetrator has to have financial pressures, rationalization, and opportunity.  Take one of these elements out and fraud is less likely to exist.  

• • • Fraud Elements:
      • Financial Pressures:  Motivation or incentive to embezzle money to relieve financial pressures.  Usually the perpetrator can’t live paycheck to paycheck, have maxed out credit cards, or past due credit accounts.
      • Rationalization: Perpetrators rationalize or justify their acts. “The company doesn’t pay me enough to do this job”, “The company doesn’t appreciate the work I do for them anyway, so I might as well reward myself”, etc.
      • Opportunity: The perpetrator has the opportuntiy to embezzle when internal controls are lacking.  The opportunity is removed when management reviews all bank statements, cancelled checks, or conducts “surprise” inventory counts.

Forensic Accounting

Fraud is an ever present and growing problem for business organizations. It can go undetected for years and is often committed by “trusted” employees. Fraud impacts nearly every organization regardless of size and the costs can be substantial.

At Artisan Accounting, our forensic accounting team is comprised of highly trained accountants, with a Graduate Certification in Forensic Accounting. We believe the best way to deal with fraud is to prevent it. Our approach goes beyond looking at the numbers to analyze and interpret them and understand the story they tell. We assess and protect organizations from fraud through a rigorous step by step approach as follows:

• Evaluate your organization’s overall fraud risk
• Identify possible fraud schemes with an eye toward industry specific criteria
• Rate any recognized schemes and analyze risk tolerance
• Develop policies, procedures and strategies to mitigate the fraud
• Implement and test detection and prevention against future fraud