Top 10 red flags of fraud.

Position:Brief article
 
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For the chief financial officer and controller, red flags to watch for:

1 Controlling or domineering management personalities.

2 Significant and/or subjective judgment in estimates.

3 Frequent changes to estimate procedures.

4 Unexpected areas of profitability.

5 Recurring negative cash flows during periods of earnings growth.

6 Omissions or inaccuracies in financial data.

7 Revenue reported after established cut-off periods.

8 Rapid growth compared to peers.

9 "Abnormal" pressure or involvement of management in selection of accounting principles.

10 Write-offs for loans 1, provided to directors, officers and management.

Examples of red flags for treasury and corporate finance are:

1 Financing that requires "quid pro quo" relationships.

2 Requests to establish bank accounts in nonoperational locations.

3 Excessive number or frequent changes in bank accounts.

4 Frequent reallocation of funds...

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