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March 2007
NEWS FROM
BP&S
April 17 Barbeque
Please join us for lunch
on April 17. For the seventh consecutive year, we will
be serving a catered barbeque lunch in the “front yard” of our
office on April 17. If you are picking up your tax return,
are hungry, or just want to come by for a visit, we would love
for you to join us.
Last month it was a marathon,
this month it was a walk-a-thon
 Bauknight
Pietras & Stormer, P.A. sponsored a team to walk in the Start!
Midlands Heart Walk which took place Saturday, March 24, 2007.
We had a team of 15 walkers who collectively raised $1,145 for
this worthy cause. Congratulations to our team!
Upcoming Speaking Engagements
Chris Stormer will be participating
in a couple of speaking engagements in June 2007. He will
be giving a speech entitled, “The Trickle-down Effect of Sarbanes-Oxley
on Smaller Telephone Companies” to the Carolinas-Virginias Association
of RUS Telephone Accountants Annual Convention in Myrtle Beach.
On June 13, Chris will be taking
part in the South Carolina Captive Insurance Association’s “Dallas
Captive Road Show”. He’ll be explaining the accounting
and financial aspects of captive insurance to an audience of
potential captive insurers and helping to promote South Carolina
as the premier location to domicile captive insurance companies.
Finally, Chris has been invited
to participate in the South Carolina Captive Insurance Association’s
“Emerging Topics Forum” in May 2007 with the leaders of South
Carolina’s captive insurance industry. The Forum is designed
to provide insights to the State as to how to further position
South Carolina to be the leading domicile of captive insurance
companies.
Looking for Experienced Auditors
Due to continued strong growth
in our audit and accounting practice, the Firm is looking for
an audit senior with two to four years of recent, high quality
audit experience. Compensation will be commensurate with
experience. If you are interested (or know of someone
who is interested), please e-mail your resume directly to Tom
Pietras at
tpietras@@bpscpas.com.
TECHNICAL ISSUES
Fraud—Its
an Epidemic
In the last twelve months,
we have identified more instances of employee fraud at clients
than ever before in our history. Over the past few months,
we’ve had conversations with owners and boards of directors
of a number of clients (and non-clients) about recent instances
of employee fraud. These have been cases ranging from
fraudulent use of company gasoline credit cards (for a few thousand
dollars) to a massive, $6 million fraud perpetrated by a company’s
controller (editor’s note – they did not become a client until
we were hired to investigate the suspected fraud). The
worst fraud has involved long-term, trusted employees.
What should you be doing
to prevent this from happening to your company? The answer
to this question can fill a book. But here are a few basic
suggestions:
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Set a good example—if
you, as a business owner or manager, are “loose” with the
Company’s assets (for example, treating personal expenses
as business expenses), you are giving employees the excuse
they need to do likewise. Think about it. If your controller
records your trip to Vegas, which was not exactly “business
travel”, where do you think she is going to record her trip
to St. Bart’s?
-
Focus on internal controls—be
sure that your Company’s internal controls are continually
enforced and evaluated for effectiveness. This should be
a key area of focus for your operational and financial managers.
Don’t fall into the, “this is the way we have always done
it” trap. Also, make sure all of your accounts are properly
reconciled each month. A good reconciliation process would
have detected several of the accounts receivable-related
frauds uncovered during the last few months.
-
Get personally involved
in internal controls—consider having all company bank
statements mailed directly to your home instead of the office.
Open the bank statements, carefully review the bank activity
for anything unusual, THEN, give it to the accounting folks
for reconciliation. This is a simple thing, but it would
have prevented a majority of the fraud we have seen recently.
-
Be alert—watch for
changes in employee lifestyle. If your controller is driving
a Hummer (with a nice ski boat attached), MAYBE he/she inherited
money from an aunt, but maybe he/she embezzled $300,000
from you last month.
-
Trust, but verify—oftentimes
the person you trust the most and think would be least likely
to steal from you is your biggest risk. Don’t fall into
the trap of granting too much leeway to a trusted, long-time
employee.
-
Prosecute—this can
be a tough decision. Sometimes, particularly in smaller
communities, companies don’t want to prosecute. If you don’t
prosecute, what message are you sending to your other employees?
And we haven’t even begun to address
computer related controls! If you would like more information
or need some help evaluating your business processes and internal
control, give us a call.
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"Bauknight Pietras & Stormer, P.A. boasts a total staff of approximately 40 professionals and staff, a client base which includes a 20% market share of Columbia's largest privately-owned businesses."
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