Young accountants looking for a career path encompassing a multitude of elements from study for CPA exam completion are finding new opportunities in fraud control. This field in accounting is undergoing a rising significance for companies with fewer than 100 employees. While their larger counterparts usually already have antifraud controls, the smaller entities are turning to CPAs for similar initiatives to combat fraud.
A recent survey shows that small businesses could reduce the significant costs of occupational fraud by spending a little on antifraud methods. Accountants are positioned to deliver this service. Antifraud techniques entail utilization of audit and financial statement skills coupled with an ability to design control systems. These are all parts of accountant expertise that begin with CPA exam preparation courses.
The survey by the Association of Certified Fraud Examiners reveals that only 56 percent of organizations with less than 100 employees had external audits of their financial records. This compares to 91 percent of operations with 100 or more employees. In addition, only 18.5 percent of the smaller companies have fraud training for employees, compared to almost 60 percent of larger entities. As for management certification of financial statements, this occurs at only 43 percent of small firms and 81 percent of larger ones. Finally, only half of the small companies have formal codes of conduct, compared to 90 percent of larger businesses.
The result these circumstances is a soaring demand for accountants to use particular skills from CPA review courses for identifying fraud. Plus, tech savvy CPAs are expected to find situations where potential fraud exists and create antifraud control mechanisms. Many fraudulent acts are committed using computers.
Smaller businesses are discovering that lack of formal systems is more costly than previously realized. Investing in fraud prevention is a cost effective means for financial control. Spending on investigation and recovery after the occurrence of fraud has proven less effective. The ACFE survey found that the median occupational fraud case amounts to $140,000 – enough to cause the closure of a small business.
Antifraud controls correlate with substantial decreases in cost and time to detect cases of fraud. Consequently, external audits are faster and less costly for companies with antifraud mechanisms in place. Accountants are therefore able to render superior value with audit processes according to their CPA study material when clients have antifraud measures in place.
Among the actions used to limit fraud are such simple procedures as job rotation and mandatory vacation policies. Establishing a written code of conduct and employee training programs are also basic to creating an antifraud environment.
These techniques are implemented with limited cost. They fall within the scope of knowledge possessed early in the careers of accountants because they encompass factors from CPA exam review. CPAs are also best positioned to show management at small businesses how to regularly review financial data for detection of fraud. Hence, the antifraud field is ripe for new accountants to embark upon when seeking an avenue for deploying a variety of skills.
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