The Importance of Management Review

According to the Association of Certified Fraud Examiners 2012 Report to the Nations, management review detects approximately 15 percent of occupational frauds. But it appears management review can help detect nonoccupational frauds as well.

The Jackson Clarion-Ledger reports that Stewpot Community Services lost nearly $100,000 in donations near the end of 2012. According to the article, management “noticed that donations were down sharply … versus the same period in 2011.” This underscores the importance of management review of financial statements, cash receipts and cash disbursements. If management had not been comparatively reviewing its donations, this may have gone undetected.

There are a few items management and business owners should review on a regular basis:

  • Bank statements and enclosures
  • Credit card statements
  • Budget to actual performance

These simple steps could help detect potential fraud sooner than later.

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Jeremy specializes in providing fraud investigation and forensic data mining services. He assists with fraud investigations through a variety of tasks, including interviewing employees, obtaining evidence, examining documents, analyzing large data sets, estimating losses and presenting findings. Jeremy has experience in using both ACL and IDEA data analysis software for forensic data mining and continuous auditing.

Jeremy Clopton – who has written posts on BKD Forensics.


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