Embezzlement

[cpabsd]

i have a client who has been a victim of his in house bookkeeper stealing from the company.  He would like to bring someone in to help clear out the mess left in her wake... call vendors and see what is actually still due, match real versus fake transactions on the books, etc.  His accounting is being done on QB online.  I am a one person shop who does not have the kind of time he needs from someone right now.  Any recommendations?  

[Catherine]

I don't know, off the top of my head, someone who could do this work. However, I helped out such a company many moons ago. Between that work and keeping them going while it was being figured out, it took a good half a year (that case the guy had been skimming for a couple of years, increasingly badly). Your client needs to know it likely won't be a quick fix.

I do know someone who *might* be able to help, but can guarantee nothing at this time.

[Medlin Software, Dennis]

Old man harsh likely, but I will try to be gentle. If the owner did not know enough to monitor or could not monitor (does not really matter actually), they need to hire out their accounting going forward. With this in mind, likely going with a "firm" (vs small shop) for a bit will be better, as a firm likely has access to in house or consulting forensic accounting skills.

Maybe they have business insurance (if a covered loss) which can help out with the forensic cost and losses?

It may be the fraud was a relatively common fake vendor scheme, so their only immediate issue is cash on hand (real vendors not paid get snippy faster than trust fund agencies). I would also ASAP check payroll accounting for issues (not depositing liabilities).

I see many businesses with in-house accounting/payroll processing, but having an outside form for review annually, semi-annual, and even quarterly. Me, for instance, since I am liable to my corp and shareholders, I hire out tax prep, which includes a surface accounting "review" for inconsistencies.

[ILLMAS]

Find a firm that specializes in forensic accounting, it won’t be cheap but the findings can be used to prosecute the individual.

[BulldogTom]

17 hours ago, cpabsd said:

i have a client who has been a victim of his in house bookkeeper stealing from the company.  He would like to bring someone in to help clear out the mess left in her wake... call vendors and see what is actually still due, match real versus fake transactions on the books, etc.  His accounting is being done on QB online.  I am a one person shop who does not have the kind of time he needs from someone right now.  Any recommendations?  

Does the company have employee theft insurance?   If so, the insurance company may have a relationship with a preferred vendor that they can bring in.

Tom
Longview, TX

[jklcpa]

Agree with both ILLMAS and BulldogTom above.  Also, when you have the amounts pinned down, be sure to issue 1099s for each year the theft occurred. Embezzled funds are taxable income to the thief.