Why you don’t need high-tech tools to find fraud - Crawford Ellenbogen

Your business may be able to use common managerial accounting practices to find occupational fraud. Variance analysis, which involves reviewing differences between actual and budgeted performance, can be particularly effective. If, for example, actual wages significantly exceed budgeted wages, the difference could indicate that you have “phantom” employees on the payroll. A dramatically lower-than-usual contribution margin may suggest skimming or inventory theft. Just keep in mind that one discrepancy doesn’t prove fraud. Further investigation is usually warranted. Contact us for assistance.