Pub. 2 2013 Issue 2

Fall 2013 33 it is not sufficient to provide this information one time. Employees and vendors need to be regularly reminded of the tip line (other than a sign posted in the lunch room). When was the last time you actively advertised your tip line? According to the ACFE’s 2012 report, 81%of fraudsters displayed one or more behavioral symptoms at the time of their frauds. • 36% were living beyond their means • 27% were experiencing financial difficulties • 19%had an unusually close relationshipwith a vendor or customer • 18% displayed control issues or were unwilling to share their job duties • 15% were going through a divorce or experiencing other family problems • 15% displayed a wheeler-dealer attitude • 13% acted noticeably irritable, suspicious, or defensive • 8% had known problems with addiction Dealers, and their management teams, should be educated on these behavioral traits and be aware of themwhen working with or observing dealership personnel. Keeping these warning signs in mind doesn’t mean accusing someone who takes a nice vacation or wears designer clothes of fraud. Should one of these “red flags” be observed, such as a mismatch between someone’s income and lifestyle, especially if noted along with other anomalies, they should try to determine if there is a legitimate cause for such circumstances. Aside from the obvious benefits of cross-training employees, job rota- tion comes with the added bonus of helping to prevent and detect fraud. Many ongoing fraud schemes are hard work and require the fraudster’s constant efforts to keep it from being discovered. This is why, as noted in the common behaviors listed above, many fraudsters displayed control issues or were unwilling to share their job duties. Removing employees (especially those in the accounting office) from their regular duties, either through job rotation or a mandatory vacation policy, long enough for a co-worker to fully take over can lead to the discovery of errors, unethical behavior, and fraud. Lastly, as with most things in the dealership, the attitude and actions of management have a great impact on the prevention and deterrence of fraud. Having a written code of conduct is a good start and most dealer- ships have that in their employeemanuals however, it is the responsibility of management to bring that code to life on a daily basis. Management, through their words and actions, needs to create and continually foster a culture where fraud is not tolerated. Violators should be dealt with swiftly and decisively; leave no room for speculation as to the importance of honesty, integrity and ethical behavior. Dealerships can never be 100% fraud-proof but small, inexpensive solutions such as the ones listed above can go a long way in providing protection against potential losses. Shelly K. Jackley, CPA a Partner with LSL CPAs. Over the years Shelly has helped numerous dealers evaluate and improve the internal controls vital to accurate financial reporting and fraud prevention and detection. Questions can be sent to shelly.jackley@lslcpas.com . 10 VEHICLES SOLD Torrance, ca ToyoTa Dealer 8.5” x 14” Buy BaCk LEttEr 2,024 PIECES MaILED recenT resulT incluDe only vehicle sales sourceD DirecTly from our DirecT mail campaign 89 VEHICLES SOLD fonTana, ca honDa Dealer 8.5” x 14” Buy BaCk LEttEr 50,000 PIECES MaILED (12.5k x 4 wkS) recenT resulT incluDe only vehicle sales sourceD DirecTly from our DirecT mail campaign 38 VEHICLES SOLD Temecula, ca honDa Dealer 8.5” x 14” Buy BaCk LEttEr 16,338 PIECES MaILED recenT resulT incluDe only vehicle sales sourceD DirecTly from our DirecT mail campaign 6 8 0 0 o r a n g e t h o r p e a v e . , s t e . h , B u e n a p a r k , c a 9 0 6 2 0 • w w w . w e s t a t e s . n e t 8 0 0 . 8 8 4 . 5 6 5 7 • 7 1 4 . 5 2 3 . 7 6 0 0