Fraud Talk: Filling Your Anti-Fraud Toolbox

Washington State’s Largest Ponzi Scheme was the catalyst for Tod McDonald, CPA to start his company and push for innovation in financial e-discovery. Years later, he and Garth Leonard, CFE, from Valid8 Financial, join ACFE Community Manager Rihonna Scoggins in the most recent episode of Fraud Talk to explore the current resources at hand to combat fraud and how fraud examiners can assess what tools are the right fit for them in this evolving landscape.

In the excerpt below from episode 121, Tod speaks with Rihonna about how you can identify the right tools for your anti-fraud toolbox. Download the full transcript in PDF form or listen to the episode at the bottom of this post.

Rihonna: We’re seeing less and less limitations to what we can do as long as we’re willing to take advantage of the tools at hand. For CFEs who are looking to advance their toolset, what are some tools that you would recommend, or even tips for how to identify the right tools for them?

Tod: I’d really advise taking a look out there at products, Valid8. There’s other tools that have been around for a longer period of time just in terms of understanding what is currently available and doing that underwriting and evaluation before you have that big case with the huge deadline. Now’s the time to be adding those additional arrows in your quiver, whether that’s starting to think about recruiting, training, getting your team up to speed given this is a counter-cyclical industry, and that it’s a boomer bust cycle oftentimes, and this labor market’s incredibly difficult. We’re looking at unemployment rates. I just looked it up, 3.6% right now as of June 2022. Being able to recruit and train and retain those teams are very difficult and labor is not cheap out there. Beginning to start thinking about the team members that you’d want on your team as you grow, and then looking at maximizing the value of that team that you do have by using tools and technologies for the lower level as we’ve been talking about data extraction and verification and validation.

Really upskilling your team to challenging and stimulating roles and responsibility versus just grinding through a tremendous amount of data and the QA thereof. From a pricing standpoint, as you’re evaluating tools, you’re going to need to think about something that ultimately fits you and your clients’ business needs that need to align the cost of your tools with the reality of your company’s cash flow and client needs. There’s a whole variety of models that are out there that we’ve all seen for different software packages, whether that’s a traditional per seat per year to a variable on-demand cost to more traditional annual enterprise licenses with X number of users or perhaps unlimited users.

In large part, due to the cloud and SaaS, software as a service, sophisticated tools that either didn’t exist or perhaps only existed at very large firms given the cost and complexity, either built in-house or sourced with a very expensive license. Those tools are increasingly now available to all fraud and forensic teams, including whether we’re talking about a boutique firm with several dozen professionals down even to single-owner professional shops. Price and cost structure is always one of those things that you’ll need to take into consideration to make sure that there’s alignment thereof.

Download the transcript SOURCE: ACFE Insights – A Publication of the Association of Certified Fraud Examiners