Mike Blanski 8-20-14

Mike Blanski is our Certified Public Accountant member. Mike gave us a Power Point presentation on the topic of auditing. Mike’s CPA firm provides auditing services which includes fraud consulting, prevention and witness work. He gave us some statistics from the Association of Certified Fraud Examiners which prepares a comprehensive report about fraud in the workplace every 2-3 years. The report covers fraud statistics and profiles individuals who commit fraud. Some interest facts are:  the average loss is $150K and 20% exceeds $1M. Fraud includes asset misappropriation, fraudulent financial statement and corruption. The report indicated that fraud has been consistent over the last 5 years. Generally the fraud goes on about 18 months until caught. Since much of the fraud is uncovered by tips given by employees of the victim organization, it is important to encourage your employees to report instances of fraud. Management review is important along with fraud education. Surprise audits are effective. The sources of tips include:  employees, customers, and anonymous. Provide a means of reporting such as a “hot line”. Small businesses are especially vulnerable to fraud due to a lack of resources to do cross-checking. 45-60% of losses are never recovered. The average frauder is male 36 -45 years old. The higher the company or the older the frauder, the greater the loss. The biggest risk is the accounting department.

Remember Mike Blanski and Graff, Ballauer and Blanski when you hear your associates mention that they are looking for certified public accounts or looking to conduct a fraud audit of their business.

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