Close the Door on Business Fraud Before Your Money Has Disappeared

David Anderson is principal of David Anderson & Associates, a Philadelphia forensic accounting firm that provides a full range of forensic accounting services including fraud deterrence, business valuation, and fraud investigation in Philadelphia and the Delaware Valley. 

“Don’t shut the stable door after the horse has bolted.”

This idiom can be traced to the 1390 English poem “The Lover’s Confession” by John Gower, however – says David Anderson, of David Anderson & Associates – a Philadelphia forensic accounting firm that provides a full range of fraud deterrence and other forensic accounting services in Philadelphia and the Delaware Valley – the message is just as timely today.

It begs the question, he said, why don’t more businesses, non-profits, and government offices implement fraud deterrence procedures before fraudsters infiltrate their finances?

“There are two main reasons more organizations don’t have fraud deterrence programs,” said Anderson, a Certified Fraud Examiner, “and they boil down to management not understanding how easily fraud occurs or how easily and cost effectively it can be prevented.”

Anderson said the initial issue is that business leaders don’t believe fraud ever could occur in their organization. Most managers feel their employees are trustworthy and loyal and because they believe that they would inherently somehow “know” if fraud was occurring.  Secondly, he said, owners and executives think, incorrectly, that fraud deterrence programs are expensive and time-consuming, making the cost outweigh the benefit.

“Given the appropriate opportunity, even the most trustworthy and loyal employees can find themselves under pressure to commit fraud,” said Anderson.  “In fact, it often is the most highly trusted employee who turns out to be the fraudster.”

He said management is generally so focused on running its business that it has neither the time nor the inclination to examine financial details that might reveal evidence that fraud is occurring.

On the cost issue, Certified Fraud Examiner Anderson said organizations need to understand that the median loss due to fraud has been determined by the Association of Certified Fraud Examiners to be approximately $130,000 for each occurrence.  But basic fraud deterrence procedures – such as management review of financial reports; a fraud hotline; a code of conduct; mandatory vacations; job rotation, and surprise audits – cost significantly less than that.  Even with the addition of fraud deterrence training for managers and employees, the cost remains significantly lower than the median loss from just one case of fraud, he said.

“We all take preventative measures to forestall bad things from happening,” Anderson said.  “We brush with fluoride to prevent tooth decay.  If a faucet or pipe starts to leak, we call the plumber before it worsens.  And we spend $40 to change the oil and oil filter on our car to avoid paying hundreds or thousands of dollars in engine repair bills down the road.

“Establishing anti-fraud controls is the same thing,” Anderson said.  “If you engage a Certified Fraud Examiner to design a cost-effective fraud deterrence program for your organization now, you are greatly lessening the chances that you will be the victim of a more expensive fraud in the future.”

Anderson recommends any business owners, non-profit leaders, or government officials who suspect fraudulent activity already is occurring in their business to immediately request a comprehensive fraud investigation. Such an examination is best conducted, he said, by a professional from an experienced firm that provides forensic accounting services in Philadelphia and the Delaware Valley.  The longer you postpone a fraud investigation, Anderson said, the greater your losses are likely to be.

If you need a Certified Fraud Examiner in Philadelphia, or if you require any other services of a forensic accounting expert in Philadelphia and the Delaware Valley, please contact the Philadelphia forensic accounting firm of David Anderson & Associates by calling David Anderson at 267-207-3597 or emailing him at

About David Anderson & Associates

David Anderson & Associates is a Philadelphia forensic accounting firm that provides a full range of forensic accounting services in Philadelphia and the Delaware Valley.  The experienced professionals at David Anderson & Associates provide fraud deterrence, fraud investigation, forensic accounting, business valuation, litigation support, economic damage analysis, business consulting, and outsourced CFO services. Company principal David Anderson is a forensic accounting expert in Philadelphia who has more than 30 years of experience in financial and operational leadership positions and is a Certified Public Accountant, a Certified Valuation Analyst and a Certified Fraud Examiner in Philadelphia.