THE KESSLER REPORT Continued A Publication of Michael G. Kessler and Associates, Ltd. ArchiveHome
Behind the Numbers®
Edition
Volume 1
Number 2
Kessler's Corner
...T E C H T A L K (continued from page 2)
This means that for almost every data file created (e.g., a
WordPerfect, or MS Word file), you will have at least one other copy
of the file somewhere on the system (e.g., the ubiquitous BKI or BAK
file). Routine backup procedures generate yet more copies, and
individual users may have their own ad hoc backup procedures.
More disturbing still is the fact that
electronic data, even when erased, can usually be recovered. A command
to "delete" a file will not destroy the file's contents--only the file
index (File Allocation Table, or FAT) is changed. Imagine a drawer
filled with labeled file folders. Removing a file label makes the
locating difficult. However, the folder itself remains intact, in the
drawer...awaiting its discovery by a determined investigator. While
DOS can no longer easily find the data, many software utility programs
can get deleted files back in their entirety.
Asset misappropriation, Fraudulent bank
statements, Counterfeit checks and invoices. The threats to you
business grow more serious every day.
It's no wonder more companies are
turning to Forensic Accountants to detect Internal fraud and assist in
prosecuting its perpetrators. And it's no wonder so many auditing or
investigation firms are hanging out the Forensic Accountant shingle,
willing and ready to help. The question is, are these firms able?
At Michael G. Kessler & Associates,
we provide experienced guidance in every aspect of a fraud
investigation, from pre-trial discovery to expert witness testimony to
follow-up compliance monitoring. Our background in corporate
intelligence allows us to investigate from a unique perspective: we
combine the financial expertise of an accounting firm with the
investigative capabilities and resources of a private
investigator.
And rather than rest on the laurels of our experience, we constantly
strive to keep on top of the latest technologies for your protection.
I personally assure you that you will be satisfied with the level of
our investigation services. After all, it's my name on the door.
This newsletter is one way we'd like to
share with you some of the things we've learned over the years, as
well as keep you updated on the latest legal and technological
advances impacting our clients. Inside, you'll find an article on how
an experienced Forensic Accountant can help you detect and root out
fraud; a look at the role desktop computers play in counterfeiting;
and what you can do to minimize your exposure to the very significant
risks.
We hope you find this issue of The
Kessler Report enjoyable and informative, and we welcome your
comments.
or
call our office at (800) 932-2221.
Q & A
The Kessler Report recently sat down with Raymond W. Dusch, Esq.,
of Counsel at Parker, Chapin, Flattau and Klimpl. We asked Mr. Dusch
to shed some light on some of the most common questions regarding
white-collar crime in the workplace. Below are his responses:
Who commits white-collar crime and
why?
Statistical surveys indicate that older
employees are more likely to commit crimes than younger ones. Older
employees are compelled to steal because financial pressures are
greater...college tuition, mortgages, etc. Also, the monetary amount
they steal is greater than that of their younger counterparts. On
average, employees aged 25-30 tend to steal small amounts, say $15,000
or so. Older employees, aged 55 and up, steal later amounts, in the
neighborhood of $400,00. They're usually higher up in the company and
have access to greater amounts.
Why does it seem white-collar crime is on the increase?
There are several reasons. One is the increasing reliance in the
business world on computer records, as opposed to keeping track of
financial records via ledgers. It's easier to alter records and not
draw suspicion from co-workers. Color photocopiers have also made it
easier to falsify company letterhead and produce fraudulent checks. The
rise of the Internet has also increased the opportunities for fraud
among the technically competent. The bottom line is that computers
have put more tools in the hands of people who are more likely to
commit white-collar crime.
What special skills do Forensic Accountants bring to the fight against while-collar crime?
Due to financial cutbacks, mergers and
the reduction of staff, the Internal controls of companies are not
sufficient to apprehend white-collar criminals. The business world
hasn't caught up with the technology and the people who are committing
fraud. This is why we're seeing the rise of outside Forensic
Accounting firms. Companies are turning to these firms and telling
them: "We know we're losing money, but we don't know where. Please
help us find the leak." Shareholders of companies that are considering
the acquisition of other companies are turning to these firms also,
for the purpose of discerning whether or not there is any history of
fraud in their target's background.
