How CPAs Can Help Clients Avoid Fraud

How CPAs Can Help Clients Avoid Fraud

As a client, whether business or individual, you are entrusting your entire financial blueprint to your CPA. As such, you probably did your research before you chose your accountant, or perhaps you’re still on the lookout for the perfect candidate to place your faith in. Either way, as protectors of their clients, many CPAs consider it their duty to prevent their clients from falling victim to any number of scams.

Remember: your CPA has the responsibility to uphold high standards of ethics and professionalism; as such, they are accountable to uphold the integrity of not only themselves and their clients but their profession as well. Failure to abide may lead to fines or loss of license.

No one is immune to fraud – it affects the young, the old, and even major corporations.

A Look at the Numbers

Fraud is only growing in this country. Dave McClure of CPA Practice Advisor points out that the Fraud Enforcement Task Force within the FBI has uncovered more than $8 billion in securities, commodities, and investment fraud losses. In addition, the Federal Trade Commission estimates 48.7 million individual fraud transactions took place in 2005, with an average loss of $60 per transaction. This is why everyone should have a stockbroker fraud attorney on their side in the event this happens.

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Online Tools.There are some tools out there gaining momentum on the market today: the Identity Theft Resource Center (http://www.idtheftcenter.org/) and the Scam Detector web site (http://scam-detector.com/) which can aid you in guarding against fraud. Discuss any questions with your CPA. These two sites are ripe with information on how to be more aware of fraud, how it happens and how to prevent it. ID Theft Center offers documents, videos, games, training workshops and presentations on risk reduction for both businesses and individuals. Scam Detector blends the benefits of a web site and a smartphone app to help identify and resolve scams worldwide, with resources such as the Better Business Bureau’s list of the most prevalent scams each week.

Be wary of scams. In addition to online tools, there are white papers and research papers on fraud and how to prevent it. Your accountant may be able to point you in the right direction, such as this resource from the Office of the State Comptroller for New York (http://www.osc.state.ny.us/localgov/pubs/red_flags_fraud.pdf) entitled “Red Flags for Fraud.” The Leicestershire County government in the UK lists 20 common scams unearthed by auditors. Check out this link to see the most common forms of fraud, from tax fraud to phishing.(http://www.leics.gov.uk/audit_twenty_common_frauds_and_scams.htm)

Pull from knowledge of the industry. Your CPA is likely continually trained in their craft, taking workshops, updating their knowledge base and learning new tax laws each year. By drawing on their education, vast resources available from the IRS and others, and the auditing process itself, your CPA can help you get around the latest scams by taking the time to clue you in through, for example, online newsletters offered every month. This is especially true of older clientele who are statistically more likely to fall for scams due to their trusting nature. However, scams can and do happen to corporate clients and small businesses, bilking them of billions of dollars a year.

Reputable CPAs are doing their part to educate their clients on scams and fraud, helping build a better, more trusting relationship over time. Protecting your personal assets has never been more important, and with the right accounting services, your CPA can safeguard you and your family. As a Woodland Hills CPA, J.M.ROSE offers tax filing and preparation, business consulting, bookkeeping and more. Call 818-992-5800 or 818-992-5800 for your consultation.

 

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