Expert Forensic Accountants Help Manufacturers Combat Fraud

Advanced analytics and industry specific knowledge to eliminate losses due to fraud

Given your profit margin, can your company afford to forfeit five percent of its revenue annually? If you’re in the manufacturing sector, that’s how much you can expect to lose to fraud, according to a 2018 report from the Association of Certified Fraud Examiners. Unfortunately, too many manufacturers don’t realize the risk of fraud until their losses are much higher. By that time, the financial damage they’ve suffered could threaten their company’s very existence. At North American Forensic Accounting, we help manufacturers identify and investigate fraud, so they can enjoy greater stability and prosperity. Our firm is comprised of experts in fraud investigation and prevention. We can assess your risks, pinpoint your vulnerabilities, and help you implement the necessary controls to reduce that risk to an acceptable level.

The warning signs of fraud in manufacturing

If you are the head of a manufacturing concern, you may suspect fraud because of certain telltale signs, such as:

  • Inventory that is inexplicably shrinking
  • Cozy relationships between outside vendors and your staff involved in the procurement process
  • Invoice issues, such as unusually high volumes, inflated pricing, or multiple payments to specific vendors
  • Poor performing vendors having contracts renewed pro forma
  • Abrupt rise in customer complaints about the quality of your products

When you see any of these warning signs, and your own people can’t provide a satisfactory explanation, it’s time to call the forensic accounting experts at NAFA.

Common types of fraud in the manufacturing sector

Manufacturers have to be vigilant to prevent fraud, since this crime can occur whenever an opportunity presents itself. Companies with lax controls on business processes are inviting fraudsters, from inside and outside their company, to help themselves to company assets.

Common types of fraud against manufacturers include:

  • Inventory theft — You know how many units you produced and how many you shipped, but what’s left in storage does not equal the difference. Someone has been making off with your product.
  • False billing — Inflated invoices, invoices from fictitious vendors, invoices for goods/services never ordered and never received.
  • Collusion and corruption — Bribery, conflicts of interest, and kickbacks all work against company interests for the benefit of a dishonest insider.
  • Counterfeiting — Someone is knocking off your product and selling it as genuine. No wonder customers are complaining.
  • Trade secret theft — A disgruntled former employee has taken your proprietary secrets and is using them unlawfully to produce a product to compete with you.

The proper controls can reduce your vulnerability to these attacks, and help you take decisive action when they occur. Our NAFA experts can show you how.

Knowledge, experience, and proprietary tools to detect fraud in manufacturing

NAFA is comprised of certified experts in fraud prevention and investigation. Our proprietary tool, FraudSeekerTM, uses advanced analytics to pinpoint the most likely areas of your operation for fraud to occur. Applying decades of knowledge and experience along with the best diagnostic tools, our NAFA team can lead your fraud investigation or support your legal representatives. If your fraud case leads to criminal prosecution or civil litigation, our investigators can provide litigation support. We often serve as expert witnesses, providing clear, cogent testimony that’s easily understood by a judge or jury.

Additional services to boost business efficiency

Of course, fraud is not the only area of concern for manufacturers. Improving business processes to enhance efficiency is a top priority for leaders in this sector. To help you achieve those goals, NAFA provides a range of services, including:

  • Internal audit
  • Compliance consulting
  • Risk assessments

Wherever your company can benefit from advanced accounting services, our NAFA experts are ready to help.

Contact North American Forensic Accounting to detect and deter fraud

North American Forensic Accounting helps manufacturers investigate fraud. To learn more, call us at 347-286-4860 or contact one of our offices online to schedule an appointment. Headquartered in Harrisburg, PA, NAFA serves clients throughout the United States, including in Philadelphia, Pittsburgh, New York City, Atlanta, Charlotte, Miami, and the Tampa Bay Area.