According to police, Jadyn Sessing, of Farmington, Minn., had a bad, bad gambling problem. Authorities say that Sessing, an assistant day manager at Cooperative Plating, fed his addiction by stealing small amounts of silver from his employer over the past three years. Although the plant noticed the shortages right away,
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Forensic services
Stakes Raised on Oversized Refund Claims
Taxpayers who receive “excessive” refunds can now be tagged with a 20% penalty on the overpayment. The provision is one of several revenue enhancers included in the recently passed Small Business and Work Opportunity Tax Act of 2007. The change to IRC § 6676(a) assesses the penalty on any claim
Wading Into Litigation Support
EXECUTIVE SUMMARY CPAs can provide valuable services as litigation support consultants in lawsuits involving business damages. This analytical role allows CPAs to enter the litigation support business before taking on the greater challenge of being an expert witness. Before accepting an engagement, the CPA should ask
Fraud
The federal Identity Theft Task Force launched a new Web site at www.idtheft.gov that outlines the Task Force’s Strategic Plan for preventing identity theft, assisting victims of identity theft crimes and prosecuting identity thieves. The Strategic Plan was developed with input from 17 federal agencies. The Task Force, which was
Tip Your Hat to Tipsters
The Association of Certified Fraud Examiners found occupational frauds are more likely to be detected by tips (34% of cases) than by internal audits (20%), external audits (12%), internal controls (19%) or police alerts (4%); accidental detection uncovered fraud 25% of the time. In some of the 1,134 cases studied,
A Risk-Based Approach to Journal Entry Testing
EXECUTIVE SUMMARY The top-side journal entry is most susceptible to fraud by management override. It’s possible to make adjustments in subledgers, but this requires collusion with other organizational departments, which is much harder to accomplish. The most frequent types of management fraud involve fictitious or premature
Whose Fraud?
The statute of limitations does not protect a taxpayer from a deficiency assessment for fraudulent returns when the fraud was committed by a preparer, the Tax Court ruled. In 2005, Vincent Allen was assessed a deficiency of $12,212 for income taxes in 1999 and 2000, based on false itemized deductions
IRS Targets Foreign Tax Credit Generators
The Joint International Tax Shelter Information Centre—an organization of tax administrators from Australia, Canada, the United Kingdom and the United States—recently focused on transactions by U.S. taxpayers with foreign counterparts to generate foreign tax credits. The IRS in response proposed amendments to regulations section 1.901-2, which targets transactions involving U.S.
Fraud
Colorado has taken what may be a first-in-the-nation approach to combat fraud and ID theft with the creation of the Colorado Fraud Investigators Unit, a division of the Colorado Bureau of Investigation (CBI). While other states have regional fraud units, CBI officials say the new unit is the first of
Technology Boosts Counterfeit Circulation
The U.S. Secret Service seized $62 million of counterfeit currency in the 2006 fiscal year, up 69% from 2003. About 54% of the fake currency collected was produced digitally, most likely using home computers and printers; in 1996, only 1% was made using digital technology. Source: USA Today.
Collaborative Fraud Networks on the Rise
Cyber criminals must adapt their collection methods to remain undetected, and it seems they’re linking together to make this happen. The latest Symantec Internet Security Threat Report found the underground networks and servers used to sell stolen data are becoming increasingly collaborative. During the last half of 2006, the number
The World’s Dumbest Fraudsters: Roundup Edition
If you thought the 24-year prison sentence handed to former Enron CEO Jeffrey Skilling was severe, think again. A Chinese court has ordered Wang Zhendong to death for his role in a fraud case. Zhendong conned more than 10,000 investors out of $390 million by falsely convincing them that he
Heavy Price for Ignoring Levy Notice
In U.S. v. MPM Financial Group Inc., the Sixth Circuit scolded the defendant for exercising poor internal controls as it upheld a penalty for failure to comply with a notice of levy against one of its employees, who was also the corporation’s co-owner and president. Because the employer did not
Flexing Your Super Financial Sleuth Power
EXECUTIVE SUMMARY Benford’s law holds that the leftmost digit in many types of numerical data is a 1 nearly one-third of the time, with probability inversely proportional to the value of each increasing digit. This phenomenon can be harnessed to analyze data to detect values that
Optimistic Executive Outlook
SURVEY SAVVY CEOs reported their level of confidence in prospects for revenue growth over the next three years as: Very confident – 52% Somewhat confident – 40% Not very confident – 6% Not confident at all – 1% Don’t know/Refused – 1% Source: PricewaterhouseCoopers 10th Annual Global CEO Survey, www.pwc.com/ceosurvey
What Is Your Fraud IQ?
Think you can spot corruption in any of its many forms? Take this (deceptively) simple test to find out just how much you know. 1. Which of the following assets are most often pilfered? a. Cash b. Accounts receivable c. Inventory d. Intellectual property 2. Which of
Want to Teach? It’s Easier Now
SIGN OF THE TIMES T oday people change jobs—even careers—several times. CPAs aren’t immune to this trend, and many highly qualified practitioners find that as their lives and interests deepen they look to give back to their professional and academic communities. One way to do that is to teach at
Data Point: 70
Percentage of all new hires who will be women or minorities in 2008. Source: Bureau of Labor Statistics, www.bls.gov .
A Taxing Workload
NUMEROLOGY Americans worked an average 116 days last year to pay their taxes, with federal taxes accounting for 77 days and state/local taxes, 39 days. How does this measure up against your other major expenses? Housing and household operation: 62 days Health and medical care: 52 days Food: 30 days
Credit Security Benefits All
BUSINESS TRENDS Increase workers’ productivity by protecting their credit? That’s exactly what employers hope to do when they add identity theft protection to their list of offered benefits. ID theft victims spend, on average, 40 hours repairing their credit history and personal funds, most of which must be done during
Features
FROM THIS MONTH'S ISSUE
Corporation’s officer held personally liable for its taxes
A corporate officer who facilitated an insolvent company’s transfer of assets to private creditors while knowing of an outstanding federal tax debt was held personally liable for the taxes owed.
