From the Forensic Accounting Experts: 3 Key Risks to Plan for in 2023
January 20, 2023
At a glance
- The main takeaway: Along with setting business goals for 2023, leaders should also re-evaluate their business continuity, cybersecurity and fraud prevention plans for essential updates.
- Impact on your business: Investing in preventative efforts now can potentially save you time, money and stress in the event that an unexpected business emergency occurs.
- Next steps: Aprio’s Forensic Services experts can provide the knowledge, support and guidance you need to navigate a wide range of fraudulent crimes, damages and disputes.
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The full story:
Like most businesses, you may have spent the last quarter of the year building out your strategic plan for 2023. You may have evaluated what you want to accomplish, where you want to be by this time next year and the tactics that will help you achieve your goals.
Although it’s both beneficial and exciting to plan for positive strides forward in your business’s growth trajectory, it’s also just as important to plan for unexpected emergencies and events. Taking preventative measures now will set you up for success in the event you fall victim to a significant and costly event.
Here are three key areas we recommend evaluating as you head into the new year.
1. Business continuity coverage for unexpected interruptions
Nearly three years ago, the COVID-19 pandemic ushered in one of the most consequential business interruptions in history. One of the biggest lessons to come out of the pandemic was that businesses can never be too prepared for the unexpected.
Therefore, as you start the new year, be sure to review your insurance coverage for other disruptions, from natural disasters (think hurricanes and other inclement weather) to fires, flood and theft. Forensic accountants like Aprio help businesses that have suffered losses develop and quantify the economic damages sustained within the terms of a given insurance contract. Having the right coverage and business continuity plan in place can go a long way toward ensuring that you are well-prepared and can weather interruptions if and when they happen.
2. Cybersecurity protocols and programs
In 2022, the total damages caused by cyberattacks reached a staggering $6 trillion. If you haven’t done so recently, it’s important to re-evaluate cybersecurity protections, vulnerabilities within your organization and the areas in which breaches are most likely to happen. If you are a retail or restaurant business, this could be your point-of-sale (POS) system. If you run a financial institution, this could be the networks and platforms that house personal identifiable information (PII). The critical systems and processes may differ depending on the nature of your business.
Once you have identified fraud vulnerabilities, you could take steps to secure them through strategies like employee training and due diligence, staying current with system updates and hiring a third-party consultant to evaluate your cyber readiness. Having the right, proactive cybersecurity prevention and response protocols in place can make the potential recovery process more streamlined.
You can also consult with Aprio’s Digital Transformation & Cybersecurity Services team for further prevention strategies to secure your organization.
3. Employee fraud vulnerabilities
Did you know that 90% of significant fraud losses are caused by internal employees? As we discussed in a previous article, employee fraud can take a wide variety of forms, including expense abuse, payroll fraud, “skimming,” check fraud or faulty invoices, among others. These crimes can be difficult to spot for weeks, months or even years without the proper due diligence in place. In 2023, consider setting a goal to train your team to spot the warning signs of internal fraud, particularly those employees who frequently deal with finance- and accounting-related activities. It is also important to review access credentials and clearances to critical systems within your organization to ensure that information is only privy to the employees who truly need it.
The bottom line
You can start off the new year on the right foot by making fraud prevention a top priority in your organization. If you do fall victim to fraud, having the right experience and expertise to properly handle an investigation is key to prompt resolution. The amount of information that can be uncovered through a fraud investigation can vary greatly by the experts you choose as partners. And if a fraud investigation ever leads to litigation, choosing experienced financial experts can make all the difference in winning or losing a case. Aprio’s Forensic Services team members have the knowledge, credentials, skill, experience, training and education to support businesses in the most challenging disputes and fraud cases. Our team provides computer forensics, collections, interviewing, forensic document analysis, investigative techniques and expert witness services to assist with determining the extent of alleged wrongful acts and complex damages.
About Aprio Forensic Services
What Financial Institutions Need to Know About Suspicious Activity Reports
4 Most Common Red Flags for Employee Expense Fraud
Building a Better AML Program for Money Services Businesses
Schedule a complimentary consultation with us to learn more.
About the Author
Haley Beatty is a forensic accounting, financial crime reporting expert. Her specialties include Anti-Money Laundering (AML), Know Your Client (KYC) investigation and regulatory compliance. She has advised some of the largest financial institutions in the world and led teams of 500 investigators. Haley works closely with clients to establish and advance AML compliance, monitoring and reporting programs that exceed regulatory requirements. She has experience advising a broad spectrum of financial industry clients from FinTech companies to MSBs and transaction processors.