Risk to business enterprises (both for profit or not-for-profit) from occupational threats can come in multiple forms and negatively impact many facets of a given operation. Some of these threats are simply the results of errors from internal control failures. Most threats, however, are not merely mistakes but are the results of intentional actions – a willful exploitation of the weaknesses in an internal control framework. This is employees violating the trust of their employer, ignoring their fiduciary responsibility and commonly takes the form of asset misappropriation, financial misstatement, or corruption.

At Pario, we are able to assist those organizations victimized by occupational fraud with their efforts at prevention, detection, investigation, and recovery.

What is Pario’s approach?

At Pario, we know that every assignment is unique, so we tailor our strategy, scope, and investigative techniques to align with the facts and circumstances. Even while managing for these variables, we look to a methodology that has consistently provided proven results. In brief, our approach entails:

  • Set objectives based on the needs of our client
  • Secure all forms of data and documentation that might be needed early
  • Conduct interviews of key personnel
  • Observe relevant operations as necessary
  • Employ transactional reviews, analytics, and other testing to prove or disprove theories
  • Evaluate results of testing as we go, designing new tests, changing scope, as necessary
  • Formalize conclusions and assist our client in eliciting information from target employees when required

Keys to the Pario Approach:

  • Carry out testing that is supportable, reproducible, and forensically sound
  • Be respectful and discreet, minimizing the interruption to our client’s daily operations whenever possible.

Knowing that the scope of an investigation depends on our client’s objectives is worth re-emphasizing. We work with our client and their attorneys to make sure the questions that they will need to answer can be answered. We recognize that those questions (i.e. objectives) can be any combination of the following:

  • Identify all wrongful acts
  • Identify all improper and unauthorized events
  • Quantify the dollar value of the wrongful acts
  • Establish the cause(s) of the events
  • Identify the parties who benefitted directly
  • Identify secondary parties involved
  • Determine the total damage in terms of dollars resulting from wrongful acts
  • Isolate and address secondary risks resulting from wrongful acts
  • Assign ownership and responsibility for systemic failures
  • Recommend solution or provide assistance in remediation and recovery

Occupational fraud takes many forms and the professionals at Pario have collectively seen hundreds of cases. Some schemes are unique to certain types of businesses, while other schemes present a threat to any type of organization. “Common” schemes we have investigated include:

  • Theft of cash receipts
  • Theft of bank deposits
  • Diversion of cash to improper accounts
  • Manipulation of retirement accounts
  • Theft of inventory
  • Theft of company resources
  • Theft of company scrap
  • Over-reporting of employee time
  • Improper company loans
  • Improper salary adjustments
  • Creation of ghost employees
  • Creation of false vendors
  • Receipt of kickbacks from vendors
  • Mixing of business and non-business expenditures
  • Improper travel expenditures
  • Kiting bank cash position
  • Misstatement of liquidity
  • Overstatement of assets
  • Understatement of liabilities
  • Falsification of revenue
  • Improper inventory valuation
  • Falsification of inventory count
  • Improper deferment of expenses or liabilities
  • Misclassification of assets and liabilities
  • Misapplication of depreciation or amortization lives
  • Improper gifting to customers or individuals