Red Flags that Lead to Fraud Examination

a person holding a calculator and a pen writing down notesIn El Paso, fraud examinations and audits may seem similar. In reality, they come with vastly different connotations. A fraud examination occurs only after there is reason enough to suspect an individual of fraud. This examination will be much more aggressive than an audit that doesn
t suspect you of anything. At Clifford Ross Raudenbush & Cooper LLC., we understand that raising red flags is easier than it seems. When it comes to fraud examination, heres a few things all businesses do when they are not careful in their paperwork.

Errors and Fraud Examination

Many alert worthy actions that lead to a fraud examination is often the result of human error. Duplicate payments and void checks are generally harmless accidents that are part of a businessday to day occurrences. The IRS though, considers this to be suspicious behavior. Mostly because in either case, the void checks and duplicate payments can become rewrite checks or for a false endorsement of a check. This is one of the most common red flags but it’s easily avoidable. By teaming up with a CPA firm, your business will stop raising red flags and you can continue on without fear. CPA firms know exactly how easy it is for red flags to be raised. Some business owners may not be as aware of this as a CPA firm can be. This is how you can avoid any fraud examinations.

Suspicious Invoice Activitiesblonde woman with glasses on the phone writing in a notebook at a fashion office

An invoice is a great way to keep track of the money flowing through your business. Because of this, they are prime targets for a fraud examination. If you are the type to round up or down your invoice to reflect even dollars and no cents, then this will show up as a red flag. It is important to write exact numbers because otherwise, it reflects badly to the IRS. Another innocuous invoice activity is a sudden rise in the volume of them. While this can mean that your business is doing well. It is viewed as a suspicious way to lie about the amount of money entering your business.

When it comes to taking care of your business, you cannot be too careful in avoiding a fraud examination. They can quickly turn aggressive and stressful for any business owner in El Paso. If you want to prevent this, Clifford Ross Raudenbush & Cooper LLC., has the expertise needed to run your business cautiously.