#fraud-prevention
Proactive strategies and controls to prevent financial fraud in your business
The SEC found Key Tronic's Oakdale plant inflated pre-tax income by ~$981,000 with fake "Monster Job" WIP entries — cutting one quarter's income 47% when corrected. Here's how the scheme exploited absorption costing, why the company paid no penalty, and the inventory controls small manufacturers should copy.
AI-generated receipts jumped from 0% to 70.8% of fraud flags between March 2025 and May 2026, per AppZen data covering 1,471 fake receipts across 174 companies — and the average claim dropped to $101 as fraudsters shifted from a few large fakes to many small ones under auto-approval thresholds.
An estimated $86 billion is lost to fraud inside churches worldwide each year, and most of it starts with one bookkeeping mistake — treating restricted and unrestricted funds as one pool. This guide explains how FASB ASC 958 classifies donor-restricted gifts, the three errors that get church treasurers in trouble, and the monthly habits that keep ministry books compliant and transparent.
DOJ's Civil Division is using AI data-mining relators to flag 2020 PPP loans for False Claims Act violations under the SBA affiliation rule, with the six-year statute of limitations starting to expire in April and May 2026 and real fraud exposure running a full ten years.
GAO's June 2026 follow-up (GAO-26-108956) finds SBA has implemented only 3 of 17 priority recommendations, leaving 14 open — including fraud-control gaps that produced ~2 million unusable COVID-EIDL fraud referrals and a Unified Certification Platform lacking basic risk and cybersecurity plans. Here's what that means for loan and certification applicants, and why airtight records are your best defense.
Nacha will raise the Same Day ACH per-payment limit from $1 million to $10 million on September 17, 2027, matching RTP and FedNow. Here's how the change affects small-business payments, why business accounts lack Regulation E fraud protections, and five controls to put in place before the new ceiling arrives.
In December 2025 the PCAOB barred CPA Jennifer Crofoot for at least three years and fined Fruci & Associates $50,000 after four public-company audits were released without the mandatory engagement quality review under AS 1220. Here is what the second-reviewer requirement actually protects against, and five concrete questions to ask before relying on any firm's audit opinion.
The PCAOB revoked Zwick CPA's registration and fined the firm $50,000 after finding its 2022 Genie Energy audit relied on the predecessor auditor's recycled workpapers with swapped names and fabricated documentation. With 61% aggregate deficiency rates at triennially inspected firms, here's how small businesses can vet the audits they rely on — and keep their own books diligence-ready.
The FTC's March 2026 settlement permanently bans Air AI and its owners from marketing business opportunities after buyers lost up to $250,000 on exaggerated AI earnings claims. Here's what the $18 million judgment covers, how the Business Opportunity Rule's seven-day disclosure and Earnings Claim Statement protect buyers, and a practical checklist for vetting any AI-powered business pitch.
A 2026 TIGTA audit found 1,375 unauthorized entries into restricted taxpayer-document areas and critical vulnerabilities left unpatched an average of 223 days at IRS scanning contractors. Here is what the watchdog found, how the IRS responded, and the concrete steps — IP PIN enrollment, early filing, e-filing — that reduce your exposure.
Shadow AI usage has grown 156% since 2023, and unsanctioned AI tools sit on company cards an average of 400+ days before detection. A practical guide for small businesses on finding unapproved ChatGPT, Jasper, and Perplexity charges, plus a five-step quarterly AI spend audit.
Freight brokers earn the spread between shipper billings and carrier cost — not gross freight value. How to book factoring (a receivable sale at 1–5% recourse, 2.5–5% non-recourse), separate quick pay discounts, track the $75,000 BMC-84/BMC-85 requirement, and use AP discipline to catch double-brokering fraud, now a $500–$700 million annual industry loss.
