By Rebecca Wilson

Blackburn, Childers & Steagall Presents an Opportunity to Discuss Government & Nonprofit Accounting with Peers & Auditors

On June 14, Blackburn, Childers & Steagall will host a Government & Nonprofit CPE in Kingsport, TN at MeadowView Convention Center. In addition to providing 8 hours of CPE credit at an exceptionally low price, there will be an opportunity for the participants to discuss issues with their peers and audit professionals who specialize in Governments & Nonprofits. The expert Government panel consists of the Finance Director from Johnson City, TN and the City Clerk/Comptroller from Bristol, VA. The nonprofit panel of regional experts includes a nonprofit Executive Director, a President/ CEO, and a Chief Financial Officer from three successful nonprofit organizations.

Congressman Phil Roe, MD and BCS Partner Karen McMurray will be presenting at a special breakfast for elected officials and board members.  Breakfast and lunch will be provided.

Participants will also have the opportunity to choose three 1 hour sessions from nine unique sessions offered. From what we have heard so far, several participants are eager to discuss budgeting, fraud prevention and common audit findings.

For more detailed information about the CPE, click this link and/or call us at (423) 282-4511.

Please visit our Registration page, or call Kendra or Kathy at (423) 282-4511 to sign up.

By Kevin Peters

“Fraud, by its very nature, does not lead itself to being scientifically observed or measured in an accurate manner.  One of the primary characteristics of fraud is that it is clandestine or hidden; almost all fraud involves the attempted concealment of the crime.”  (2010 Report to the Nations; Association of Certified Fraud Examiners; www.acfe.com/rttn).  That quote from the 2010 Report to the Nations, issued by the Association of Certified Fraud Examiners underscores the critical importance of all organizations to address fraud risk factors. 

Periodically, the Association of Certified Fraud Examiners (ACFE) publishes their findings and recommendations in their “Report to the Nations”.  The 2010 Report is the first report to include cases from countries outside of the U.S.  The report is based upon 1,843 cases of fraud occurring between January 2008 and December 2009. 

Some of the Report’s findings include:

• Survey participants estimated the typical organization loses 5% of its annual revenue to fraud
• Small organizations are disproportionately victimized by occupational fraud due to overall lacking of anti-fraud controls.
• Anti-fraud controls appear to help reduce the cost and duration
• Frauds committed by owners/executives were more than 3X as costly as fraud committed by managers
• More than 80% of the frauds were committed by individuals in one of 6 departments:  accounting, operations, sales, executive/upper management, customer service or purchasing
• More than 85% of fraudsters had never been previously charged or convicted for a fraud related offense
• Fraudsters often display warning signs that they are engaging in a fraud.  The most common behavior was living beyond their means (43%) followed by experiencing financial difficulties (36%)
• Employee education is a key foundation of preventing and detecting fraud. 

What can you do?  There are many things to consider for any organization, regardless of size.  Employee training and education is a key consideration.  It is vital to maintain an open door policy and overall atmosphere of communication to allow all employees the opportunity and freedom to report any suspicions.  Consider implementing an internal audit function including surprise “audits” of different higher risk areas/transactions.  Management should develop and periodically review fraud risk assessments.  Other areas to consider include:  level of oversight and review by top management, segregation of duties, mandatory vacations and job rotations.  “Tone at the Top” is also of great importance.  The Report also recommends having proper support programs in place to assist employees that are struggling with addictions, mental/emotional health family or financial problems. 

Fraud can happen in any organization by any employee.  Each organization should consider what steps they can take now.  The old adage, “an ounce of prevention is worth a pound of cure” certainly would apply with respect to proper fraud prevention controls. 

Source:

2010 Report to the Nations; Association of Certified Fraud Examiners; www.acfe.com/rttn)

During Blackburn, Childers and Steagall, PLC’s continuing professional education (CPE) seminar scheduled for June 14 at Meadowview, we will include a session on fraud indicators and related controls.  Please visit this link for information regarding this CPE seminar.

By Chad Kisner



It’s just barely a new year, not even a month has passed upon 2012, and I’m sure it’s safe to say many of us have quickly returned to a busy schedule of work, family, activities, etc. Oh, how quickly life seems to return to “normal” when the holidays are over and things turn, well, back to “normal.” So, how’s this “normal” January going for you as you prepare for your annual audit (or for some on a fiscal year, consider this your mid-year check-up)? Are you more prepared for this audit than the last, or have you closed your year in just the “normal” way you’ve always done it? Have you looked for possible improvements you can make to help your audit go more smoothly? Have you called or e-mailed your audit team to let them know of something very different in this year’s books?


The audit process is always based upon risk, and there is a lot of risk out there within a client’s books and situations. So, as a result, auditors are always asking about controls, more specifically internal controls, and if the auditor is asking the right questions, they’re probably asking about the internal controls over those risky areas.


You want your audit to go smoothly – you know, no adjustments and not a single comment to report to the board, right?


If you answered yes, then begin the process by doing a little reflection on your books for the past year and think about all the things that are different than in the past. More than you probably thought, right? Now, once you’ve made a good list, give your audit partner or manager a call and share with them all the things you’ve thought about and any concerns you have.


That’s pretty easy, but you would be surprised how much help you just provided! Since as I mentioned audits are based on risk, you just helped the auditor know where you see some risk, which makes their assessment just a little bit easier. Not only that, hopefully you were able to give them some insight into what you’ve done to make sure those risky things have been handled to the best of your ability (i.e., the exercise of internal controls). So, do a little reflection and see what you come up with – you may be surprised, but if you share that information, then your auditors won’t be.