Category Archives: PSA

Even When You Don’t Want To…

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Linda Kadzombe

Linda was not my friend. I was in high school, sitting in the car, in the school parking lot, with my father, waiting for my little sister to show up. She ran up, with a friend and they stood by the car, smiling and sporting matching nose rings. My father looked up and the two girls, and their matching noses, and exclaimed – “I suppose nose rings are part of the school uniform now.” That is my first significant memory of Linda, who was my sister’s friend. Along with a great group of friends, Linda and I rang in 2000 in Victoria Falls. We talked about the fact that we were both moving the United States and we promised to keep in touch with each other. This vague promise turned into a relationship that the word “friend” does not do justice. With our families far away, we checked in with each other almost every day and often the conversation started this way: “Just checking in. I’m alive.” Once, I called Linda when I stuck in a dress I had ordered online and that I was trying on. She was living in Boston and I was in New York City and yet, she was the first number I thought of dialing. We were travel buddies and talked about becoming the sweet old lady travelers that we often came across during our trips. We shared a love of European chocolate and I was a person she taught, and gave permission, to stab her with an EpiPen should the need arise.

On March 6th, I received a call that had never even drifted into my imagination. While flying back home from an epic vacation with her cousins, Linda passed away. The news was devastating; it still is. At the same time, there was a lot to do. Whether or not you have planned for death, when death happens, there is a lot that needs to be done, not only to put your loved one to rest but also to sort out your loved one’s affairs. Friends and family came together for Linda and, as we navigated various issues, we were frustrated, energized, and touched, often all at the same moment. It made me think about the importance of planning, not only for the workplace, but also for one’s personal life.

The first step is the dreaded will. No one wants to ever think about their mortality but, even when you think you have nothing, you always have enough to put in a will. At the very least, you have your wishes. Even when you think to yourself – oh, I am single, and/or I don’t have children – you still should have a will. Remember that a will is a legal document and you should be sure to comply with the law, or your will may not be accepted as binding. For instance, the rules about whether or not a handwritten will is recognized varies by state. You should also see if your financial accounts can be set up to be transferrable or payable upon death, as this will save survivors the headaches of dealing with probate court. In addition to letting people know what you want done with your stuff, you should also think about how and where you wish to be laid to rest, if that is something that is important to you.

We live in an age of paperless billing and most business being transacted through online accounts. This means that, for many of us, all our accounts have a login and information about accounts and their existence may only exist in our email accounts. To questions about what accounts and liabilities Linda might have, we could only shrug and guess. Dashlane estimates that the average user has 90 online accounts! Consider making a list of your accounts that you will keep safeguarded in a safe, or with a lawyer, if you keep your will with a lawyer. There are various ways in which to work to both safeguard your personal information and also ensure that your accounts are known and closed correctly, after passing.

If you don’t already have it, get life insurance. The policy doesn’t have to be a big one; just enough to cover the costs that may come up due to death. These include:

  • Payment of final expenses;
  • Taking care of your loved ones, if you have loved ones that depend on you;
  • Payment of debts, so that your next of kin are not on the hook for them;
  • Payment of estate taxes

It may seem horribly morbid to talk about death and it is certainly no fun to deal with the affairs of a loved one. In the midst of grief, you don’t want to deal with some of the headaches that can pop up around the administration of everything – dealing with hospitals, funteral homes, airlines or whatever. Fortunately, Linda had an amazing network of people who loved her (and some incredibly kind strangers who saved the day more than once). All worked hard to get her home and laid to rest near her family. We also were able to spend a lot of quality time with friends and family that we had long promised to spend time with you. You know how that happens – next week, next month or next summer turns into ten years. However, through it all, we had a lot of figuring out how to do something or where to find things because we had never even thought about navigating this terrain.

Take some time to think about what you have and what you want done about it. Talk to your loved ones and tell them to make plans, if they have not already. Remember that it is never too early to plan and, unfortunately, often too late.

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One Team, One Dream

 

Pyeongchang Olympics Cross Country Men

The Winter Olympics are going on and I am filled with joy. From the opening ceremony until the end, I am inspired over and over again. Just the other day, Ester Ledecka, from the Czech Republic, won a gold medal, on skis she borrowed from USA’s Mikaela Shiffrin. Athletes, representing their countries, come together to compete against each other while, at the same time, showing incredible sportsmanship, teamwork and support of each other. Four skiers from so-called “tropical” or “exotic” nations (Colombia, Morocco, Portugal and Tonga), who were among the last to finish, waited for the last athlete, from Mexico, to finish. They cheered him across the finish line and raised him in exultation. How incredible is all that?

Since I stepped out and started my own company, I have been spending a lot of time alone. Honestly, even though I was working in offices, my last few positions had me working mostly on my own. Seriously, I could go for weeks without talking to anyone about what I was working on. I would sometimes wonder if anyone cared. I started working on a project a few months ago and I am being reminded how powerful a great team can be.

Modern offices are designed to have more interactions among people – offices are more open, there are games set up in the office and people can hang out on couches. Imagine that, comfortable furniture in the office. With all of that, though, I am finding that the real trick to interaction and successful communication at work sits with the people. I have been in open office spaces where, for days on end, people say barely a word to each other. I have walked down hallways where the person heading towards me will risk breaking their neck by looking anywhere but at me – the horror of a greeting is strong, apparently. The Inner Auditor kept me thinking about the priority of people in a business and on a team.

In the work that we do, we are often under pretty stressful conditions – clients are almost never happy to see us, we have tight deadlines and we are often trying to make sense of things that don’t make sense to the people doing those things. Each of us is incredibly busy and run the risk of keeping our heads down just get through everything assigned to us, while staying within budget. With that kind of pressure, the temptation is high to just put our head down, plug in our earphones and only engage when absolutely necessary. I am sure that approach can get the job done but I know, without a doubt, that the structure of the team that I worked with ensured that we excelled.

We did not choose our team, but I ended up working with three incredible women who have made me better at what I do and how I do it. I believe that we all agree that we have benefitted from our experience together. Each member of the team has a knowledge strength and is more than willing to share what they know and help us get a little stronger too. Even as deadlines have loomed and hours have stretched, our team has prioritized wellbeing. We have been taking time to read more, laugh more and talk to family and friends more. Because our team has come together on these various levels, we are also able to communicate the difficult information that comes up during our work. Sometimes, a person may come across information that will either upset the client or lead to more work. Sometimes a person may realize that they missed something. In these cases, if communication is not good, that person may choose to remain silent. Instead team members may end up spending energy on hiding issues and hoping that they are not discovered. That is never a good thing. Not only did our team feel comfortable about bringing up the issues, we were always willing to brainstorm and work together to resolve them.

Although this may sound like I am seriously crushing on my awesome team (which I am) it is also a great lesson in the incredible value of having a team that is talking to each other and working together in order to produce great work. In an office where no one is talking, and people are not interacting, how long do you think it will take to realize that something is wrong? If people view saying good morning as something to be avoided at all costs, who are they going to tell when they think the person in the cubicle next to them is doing things that they shouldn’t? If people are not talking about what their fellow work mates are doing, how are they to know who to turn to for assistance and will they even feel comfortable approach Janice who barely grunts when they come across each other in the office’s common space? And then, when fraud or error is found at the company, can you really be surprised that it took as long as it did for it to be discovered?

The time you take to get to know the people you are working comes with benefits that are worth far more than that time. It takes more than knocking down walls and providing great coffee. We spend a lot of time talking and reading about the impact of communication. We know this in theory but how often do we put energy into putting this into practice? I know that each one of us stepped outside our comfort zones in order to get to our Dream Team status. Each one of us made a conscious effort to reach out and share of ourselves. Each one of us was determined to produce exceptional work and communication was a key element of achieving that. I have been inspired by these women that I have worked with. I have laughed, been moved and been brave with them.  I shall be truly sad when this project is over and eternally grateful for the great experience. #OneTeamOneDream

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Oh, Not So Much Fun…

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On Christmas day, I was chatting with my niece, during family celebrations. My phone buzzed and I saw a notification that she had just sent me a message. That was truly odd, because, as I mentioned, we were chatting and, unless she was using her telepathic skills, she was not texting at the same time. Nevertheless, I asked her if she had sent me a message. She looked at me as though I had lost my mind, but double checked her phone and shrugged. It wasn’t me, she said and carried on with her day. Since she was engaging with people and not her phone, and because we were having a fun time with family, I decided that the likely bad news could wait.

I attended a talk earlier in the year where the speaker told us – There are two types of people: those who have been hacked, and those that don’t know it yet. By the time we got home, my niece had gone from being in the latter group to being a panicked person in the former. Often, a person finds out that they have been hacked when, as happened to my niece, their contacts complain about spam messages that they have received from that person. However, more and more often, people don’t know that they have effectively been hacked because the party hacked is a company that is holding people’s information.

In 2017, the most notorious example was, on 17 September, when the credit reporting agency, Equifax was hacked. Initially, the information was that about 143 million people might have been impacted. However, that number has climbed and what kind of information was accessed was vague. When people tried to check with Equifax, they often got different responses each time that they tried. Also, as the months have gone by, the number of people impacted has climbed. If Yahoo! is anything to go by, who knows what the final count will be. The best advice to take right now, is to assume you have been impacted and to take preventative steps and, if you have not already done so, freeze your credit with all four of the major credit reporting agencies.

What is unsettling about how companies announce that they have been hacked is how long it takes for the news to come out. Equifax claimed that it discovered their breach at the end of July but they only made a public announcement in the middle of September. It was only in October 2017 that Yahoo announced that all of its accounts were hacked in 2013. That’s not a typo; they are telling us that if you had Yahoo, Flickr, Tumblr, or any other account owned by Yahoo, you were hacked in 2013. What is anyone supposed to do with that information, four years later? This is worse than a “Look out for falling ice” sign. In November, we found out that Uber had been hacked in 2016 and that the company had opted to pay off the hackers to destroy the information and keep the hack quiet.

The big takeaway is that it may be a while before anyone lets you know that you have been hacked and, unless you live completely off the grid, it is smart, and safe, to assume that you have been hacked. That said, there are steps that you can take to try to minimize the damage that can be caused by hacking:

  • Freeze your credit with the major credit bureaus. Learning about the Equifax breach was especially frustrating because people do not choose to share their information with the credit bureaus. I rolled my eyes at a headline that referred to “customers” being compromised. The best one can do right now (beyond not having a credit history of any kind) is to try to limit how much information gets out.
  • Check your credit regularly. Do this at least quarterly, to make sure that cards have not been opened in your name and without your permission. Annual Credit Report is the only website, authorized by federal law to provide you with a free credit report from a credit reporting agency every twelve months. A great way to spread out the checking over the year is to get a report from one of the agencies every 4 months (instead of getting all three in one fell swoop).
  • Use two factor authentication. This gives extra security over only using a password. The most common method of two factor authentication is having a company send you a text with a unique code, before you can complete logging into an account.
  • Don’t click on every link you come across. If you receive an email with a link and it is not something you have been expecting (and sometimes even if it is something you have been expecting) don’t click on a link because it is there. Check the email to make sure you recognize where the message is coming from.
  • If you trust the link and have clicked on it, still be careful about what information that you share. If you start to feel as though a company is asking for too much – either over the phone or through a website, stop sharing information. Find out, independently, if you really need to share that information and, again, make sure you know who you are sharing your information with and why.

Try to include these in your list of New Year’s resolutions. It won’t stop you from being hacked but at least, it may improve your chances of finding out about it early and taking appropriate steps.

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Something’s Not Right

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When I was just heading into my teenage years, something was not right. Not with me, but with my mother. It was unsettling for me and then miserable. It was difficult enough to be heading into my teenage years but my mother was not helping by being off.

First of all, she began to act out of character. She would come home from work and ask for a glass of water with lots of ice in it. You may not see anything wrong with that, on the face of it, but it was plenty odd because my mother never drank glasses of water with lots of ice in them. And now she wanted a glass every night. To make things even more stressful for us, each glass was closely examined and if it was not perfect – not enough ice, water somehow looked cloudy, the glass was not perfectly polished – one of us kids would have to get a new glass and make sure that it was perfect this time.

Then there was the language. My mom started using new slang. For all I know now, she may have started hanging out with a new lunch buddy and picked up some phrases from this new friend. But, along with the water, this new language mom was freaking me out. It was truly odd. But the breaking point came, for me, one Saturday morning. I was following my mother around the house and she watered and spoke to her many, many plants. This was totally in character so that gave me some comfort and was likely the reason why I was hanging about with her that morning. Then I noticed that her dress didn’t quite fit. It was tight on my mom and that was, once again, out of character for her. What was going on?

That thought was still with me as I spent time alone that afternoon. What was going on? Well, after an afternoon of pondering, I had narrowed it down to two options. Either my mother was having an affair or she had been abducted by aliens and they had left an imposter alien in her place. My two options seemed to be the only options that made sense to me at the time – I had friends at school whose parents were going through divorce. Something about our conversations made me think that divorcing parents did not act like themselves. But, if it wasn’t divorce, it could only be aliens. I blame Star Trek for getting me to believe that my mother could be abducted and a poor replica, that wasn’t quite the same size and betrayed itself with its weird speech patterns and love of ice, be left in her place. Both options were devastating for me; either way I was losing my mother and that filled me with despair. I even cried a little that afternoon.

Fortunately for my state of mind, just that week, as though she knew what was going on with me, my mother broke the news. She was pregnant (some may say I was sort of right about the alien in her body). What a relief!

It turns out that, despite all the clues that I noticed, I came to a completely wrong conclusion about what was causing the changes in my mother. Fortunately all my wrong conclusions led to was an afternoon of sadness and tears. In the work place, the consequences of taking data, red flags and other clues to incorrect conclusions can be far more costly. A classic example is that of Rita Crundwell, who defrauded the city of Dixon of over $53 million. The people who worked with her saw that she had a growing stable of quarter horses and was often traveling far and wide with these horses. They assumed that the horses paid for themselves and more and this was how she could afford to keep them. People in the horse world, who knew that horses cost more than they made, thought that she had some kind of trust fund that paid for her extravagant lifestyle. When Rita would not let anyone do her work, or even collect her mail, they thought she was being a great treasurer who diligently controlled her city’s budget. No one saw all the clues and thought she was embezzling money.

If someone was paying attention to the clues and knew how to analyze all the red flags that Rita Crundwell left in her wake, her fraud would never have lasted for the two decades that it did. If, for instance, the city had taken on the services of a forensic CPA to analyze, design and implement control systems and to help them with fraud prevention and deterrence, they may not have lost over $53 million to Crundwell.

This is an excellent reminder of how important it is to have a CPA, with experience and qualifications in financial forensics, to analyze and assess your business’s operations and finances to see what clues are there and what those clues really mean. You may notice that things are amiss, but how willing are you to accept how expensive coming to the wrong conclusion can be for you?

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If Lost… Then What?

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At the end of May, I was on my way to an event, when a flash of pink on the sidewalk caught my attention. I stopped and realized that I was looking at a small square of leather. I bent down, picked it up and turned it over in my hands. It was a wallet with a MetroCard, some credit and debit cards and a driver’s license in it. I pulled out the license, looked it over, and walked over to the restaurant that was a few feet away from where I had just found the wallet. I must have made a few people nervous, staring at them and then down at the license, to see if anyone there resembled the photo. No luck. I then pulled out my phone and tried a few quick searches, online, to see if I could figure out how to contact this woman. Her name was more common than I imagined; several options came up and none appeared to be her. Yes, her license had an address on it but, the license had been issued several years earlier and people in New York City can move around quite a bit, in search of amenities such as a view, an elevator or affordable rent. As I was running late, I decided to go to my event and put my search off until later. On my way, I spotted a parked police car. I got excited, thinking that I may be able to hand over the wallet, but the excitement faded when I got close to the car and found that there was no one sitting in it.

When I got home and had more time to do so, I hunted down the woman whose wallet I had found and delivered it to her. Even if she had cancelled her cards, I am sure she was happy to get her stuff back – who knows maybe her MetroCard still had 29 days of use left on it. That experience reminded me of a time, years ago, when someone stole my handbag at the airport. I was livid that someone had invaded my space and even stood yelling, in the terminal, for the thief to just take my cash and give me back my stuff. Suffice to say, that did not happen. I did, fortunately, have a kind gentleman give me money to get the train back home. However, a few weeks later, my phone rang and it was the airport, calling to tell me that my bag had been found. They had been able to contact me because I happened to have a dry-cleaning slip in my wallet, and my phone number was on it. I was lucky that I had that slip in my bag but these two events really got me thinking about recovery plans, not just in business, in other aspects of our lives.

With a wallet, for instance, you can keep a business card in the wallet, or put a small card in your wallet with an email address and/or phone number so that, should you be unlucky enough to lose the wallet and a kind stranger picks it up, they can contact you and figure out how to get it back to you. It is an easy thing to do and could be hugely useful. It doesn’t even have to be your usual email address, if you have fears about your inbox being inundated by unwanted email, you can create an email address that you keep for moments such as this.

We never think that we will either lose our stuff or have it stolen from us but it can happen to any of us. It can be personal or it can be a business loss, such as a system crash, or theft and, in all cases, having a recovery plan will go a long way to make recovery less stressful and less expensive. If, at this very moment, you lost everything on your computer, what would you do? Does the thought give you heart palpitations because you would lose very important data, with no way of getting it back? Would you have to shell out a lot of money and spend valuable time working to try to recover everything? Would you wonder whether or not your business could survive such a loss? If this thought is a scary one to you, you should be thinking about sitting down with trusted professionals, to create and put a comprehensive protection and recovery plan in place. You should review various scenarios, even if you think it wouldn’t happen to you. Things to consider when doing this:

  • Are you backing up your data on a regular basis? Automating this process is a great way to make sure that it happens – you don’t want it to all depend on your remembering to do it.
  • Where are you keeping your backups? Do you keep a backup offsite and unconnected to your current system? You don’t want your backup corrupted, should your system go down.
  • Are you checking the integrity of your backups? It isn’t helpful to think you have been creating backups and find out, when you need the backup, that the process was not occurring.
  • Now that you have backups, do you have a recovery plan? Do you know what you are going to do should things go awry? Does your staff know? Do you have the plan in writing and in a space where it can be easily accessed? Have you trained your staff in this recovery process?

There are people who are well-trained in helping you create a backup and recovery plan and that can start with your CPA. You want someone who has experience and knowledge regarding best practices that are practical, useful and effective.

We are humans who work with technology that we have built and we must, therefore acknowledge that we are not infallible and we must therefore create, review and update our contingency plans. And that plan can never just be relying on the kindness of strangers.

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The Best! The Worst!

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Today is marathon Sunday in New York City and, for years now, I have lived less than a block from the marathon route. It is one of the most exciting days of the year for me and I love walking down to the end of my block to join the over one million spectators who line the 26.2-mile route to cheer on the runners. All too often, New Yorkers are thought of as people who just don’t care about others. Per the stereotype, it’s just keep out of our way, don’t look us in the eye and don’t do anything that will slow us down and we won’t have any problems. Marathon day is a day when I am reminded that the city is a city full of people who do things like come out to cheer and high-five strangers as those strangers test their bodies and spirits. I love it.

There are moments, such as the marathon, that bring out the best in people. Disasters, as sad as they may be, also bring out the best in people. People come out and give time, money and other resources to help those in need. Tragically, disasters also tend to bring out the worst in some people. Some among us see disasters as a great opportunity to take advantage of others, for personal gain. Some of the fraudsters are blatant in their unscrupulous ways because they are targeting the desperate among us. A current example is the migrant crisis in Europe, where refugees, seeking to escape dangers at home, will give up all their resources in the hopes of reaching a safer place. Instead, some hand over money to greedy criminals who then lead them into more danger and, sometimes, even death.

Other fraudsters are more slick in their strategies to profit from the suffering of others. In recent months, natural disasters such as fires and tropical storms, have left many in the United States needing assistance. Just in October, while communities in South Carolina were struggling to recover from flooding damage, warnings were being sent out because of an influx of fake charities. These counterfeit charities, preying on the generosity of those wishing to do something to help the displaced and impacted, were taking people’s money and doing nothing to help those in need. Just a couple of days ago in New York, a company agreed to pay a settlement of $700,000 for pretending to collect secondhand clothing to help charities. Instead, this company sold the clothing, paid almost nothing to the charities and made profits of over $10 million dollars, it is estimated.

Because, even in situations where we should be helping others, there are those who are looking to help themselves at the cost of those around them, it is important to be vigilant.

  • It was Halloween yesterday and parents were checking to make sure that the treats that their kids collected were safe for consumption. Yes, people may appear to be doing good things, but it is only smart to make sure that everything is above-board.
  • Even though it may seem like a drag, check up on who you are giving your money or time to.
  • The name may sound familiar, but make sure it really is who you think it is.
  • If you feel uncomfortable about something, it is okay to say no. There are many opportunities to give back to those in need and you will find the opportunity where you are sure that what you are doing is benefitting those who need it.
  • Don’t give your personal information to anyone.
  • If you believe that you have been scammed, contact your local authorities and report it.

Giving is a vital part of what makes us communities. Just make sure that you are giving to the right people and not the unscrupulous scammers around. You know, like that obnoxious person in the neighborhood who decides that they just have to cross the street as the runners are passing by. Don’t give that guy the time of day.

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While We Are Making Plans

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Because I live in the Northeastern part of the United States, I have become one of those people who lives for the brief summer months. There are only a few brief months of warmth and sunshine (and, often, humidity) in which to have a fun life. There are outdoor shows, there is the beach, there are picnics and that’s just a small sliver of all that needs to be done before the cold and darkness return. In my case, I had also signed up for a half marathon, to be run in the middle of October. Summer was my chance to keep on running and build my endurance and distance. When I run, I run on streets and have to deal with cracks in the sidewalk, people getting in my way and traffic. I am always on the lookout to stay safe and not hurt myself. So, in addition to all the stretching and foam rolling (never enough) that I do in order to prevent injury, on top of all of the careful calibration of distance that I do so that I don’t hurt myself by doing too much too soon, I am also keeping a watchful eye on every step that I take in order to keep myself safe and sound during my run.

Well, on a bright and sunny Sunday morning, at the beginning of August, I stepped out of my apartment building and into the parking lot, armed with a whole lot of recycling to put out. The next thing I knew, I had tripped over something (turned out to be a concrete block) and I was stumbling. The recycling flew out of my hands and the first thought that I had was, “this better not mess with my running”. In an attempt to break my fall, I jammed my leg into the ground and a sharp pain shot up my leg. I crumpled, in my mind, elegantly to the ground. It turns out that for all my measures to protect my body, all it took was taking out the trash in order to fracture my knee. I ended up with my knee in a brace and using a cane (that I still have). Throw in a surgery that I had in September and it turns out that this summer was not the summer I had imagined at all. An acquaintance said to me that life is what happens while we are making plans.

Most people business owners, similarly, spend a lot of time and invest a lot into protecting their businesses from most expected challenges. Depending on the size and complexity of the business, this will range from control systems to detect and prevent fraud and waste, to various reports that business owners and management use to monitor how the business is doing. The question that stands though is, what are business owners and management doing to deal with the unexpected or the events that they hope will never happen? Does the business have a disaster recovery plan? Has the business taken steps to encourage tips that will help uncover weaknesses in control systems and catch fraud and waste? Does the business know what it will do when fraud and waste are uncovered? Yes we make plans and take precautions, but are we ready to deal with what happens when the unexpected happens? Are we ready for, you know, life?

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Checking Up

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Several years ago, I was working on an assignment that had me flying out to Boca Raton, Florida, every Monday and returning to New York City on Friday night. It was great because it was a brutal winter in New York City and pleasantly warm in Boca Raton. It was terrible because it was close to impossible to get anything done over the weekend. One week, I had to admit that there I needed to get one of my teeth looked at. It had been causing me some pain and I knew I had to sort it out before it started hurting a lot. My challenge was to find a dentist who took patients on weekend days and who I could get to easily. I found one online and went in to see him on a Saturday morning. He determined that I needed a filling fixed and he got to work. What I remember about that day is how incredibly painful it was and how unsympathetically the dentist kept ordering me to “be strong”. I was traumatized – so much so that I did not go anywhere near a dentist’s office for years after that. I knew I should, but the memory of the pain and a dentist who was in need of a heart kept me away. Other aspects of my body were very well taken of; I went to my annual physical and that was always a pleasure, compared to my dental disaster. I brushed my teeth but, other than that, they were pretty much on their own.

One nights, I fell asleep while sucking on a throat sweet and, the next morning, I woke up feeling as though my teeth were about to fall out of my head. I was in a panic; I was too young to be toothless. I was desperate and looked up dentists located close to my office. Thankfully, I was able to find a dentist, a few blocks away, who was able to fit me in that very day. As he examined me, a poem from my childhood, “Oh, I Wish I’d Looked After Me Teeth” ran through my head. Fortunately, this time around, I get to keep my teeth. My dentist was a great guy who doesn’t believe in causing pain and suffering and NEVER says to me, “be strong”. I did, however, have to go through a series of appointments to repair the damage that had accumulated over the years that I had avoided the dentist, dentist I could have avoided. I have not missed an appointment since, although I get nervous when the machine turns on, even just to polish my teeth.

Like my teeth, a business needs regular checkups to maintain its financial health. Yes, a lot of companies review their financials on a monthly or quarterly basis, but how many are assessing their control systems and taking steps to update and analyze how they prevent and detect fraud? The fact that the median length of a fraud is 18 months before it is detected and that many frauds can last many years as in the cases of Bernie Madoff and Rita Crundwell, to name a few high profile cases, implies that these steps are not taken often and rigorously enough. No one really thinks that it will happen to them and some people think that their finance department, accountant or auditor will keep them safe from fraud. This is because they do not fully understand the roles and duties of their auditors and accountants. Other people don’t want to spend the money on fraud prevention and detection. However, when you start thinking that Rita Crundwell stole over $54 million and a quick search of the internet brings up many other recent cases of embezzlement of millions of dollars that have been discovered. There are many more that either have not been recorded or are of lesser amounts.

Think about this:

  • Fraud goes on for an average of 18 months but many go on for much longer.
  • Usually fraudsters start out stealing a little money but as times goes on and they are not caught, the amounts stolen grow and grow and grow
  • The knowledge that a company has allowed theft to go on under its nose for years can negatively affect its reputation, leading people to believe that it may not be a safe and ethical place to do business

These are just a few things to think about when it comes to detecting and preventing fraud in your company. It only makes sense to get a qualified Forensic Accountant, Certified in Financial Forensics to assess and evaluate your companies systems in order to beef up your fraud prevention programs and also, perhaps to detect possible fraud? Now, I learnt a very painful lesson before I started to take care of my teeth. Do you want to learn a hard, and possibly expensive, lesson before you take proper care of your business?

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All For Love

Al_Capone_in_Florida

“Valentine’s Day; red roses
It’s said that some have died for love.
In North Clark Street, Chicago
They died for money…”

It was with those words, uttered by Laurence Olivier, on a Paul Hardcastle song about greed, that Al Capone first fascinated me. It started with that tale of the St. Valentine’s Day Massacre – “It’s a good day to die,” the gangster laughed in a scene in the video – and it continued as I learned more about his legacy as a famous gangster. I mean, as perennially single as I have been most of my life, I have been known to don black clothing and disdain on February 14th, but to shoot a bunch of people on that day? That just seemed a little much. You couldn’t wait until the 15th? What kind of person does that? I found out that others were similarly outraged by Capone’s actions and expended a lot of time and energy trying to bring him down.

A few weeks ago, I was reminded of Al Capone when I spoke with Meredith Engel of The New York Daily News. She was reporting on the financial issues faced by those in the marijuana business. Marijuana is legal in some states, such as Colorado and Washington, but is still illegal on a federal level. This dichotomy may lead to confusion on what income is taxable on a state level, where pot is legal, and on a federal level, where it is illegal.

What does this have to do with Al Capone? Well, despite being blamed for the St. Valentine’s Day Massacre, among other murders, and in spite of being investigated for racketeering and his bootlegging business, the authorities struggled to get Capone convicted on his gang-related crimes. However, there was a government agency that he had not seriously considered; the IRS. You see, it does not matter where your income comes from, be it from legal or illegal sources, you have to pay taxes on it.

It doesn’t matter whether you are selling pot or stealing from your boss, if you don’t pay taxes on that money coming into you, you cold find yourself in trouble with the IRS, ranging from interest and fines to imprisonment. Federal agents couldn’t find enough evidence to pin murder on Al Capone, but they were able to use forensic accounting methods to put together enough evidence to indict Capone on tax evasion charges. He was sentenced to 11 years in prison, was fined $50,000, was charged $7,692 in court costs and $215,000 plus interested in back taxes.

Preparing a tax return can get rather complicated. Figuring what deductions, exemptions and credits you are eligible for can be a like navigating a maze. However, the most simple part of the tax return is the income that you start with. If you don’t want to get into trouble with the IRS – REPORT ALL OF IT, regardless of how you came about it.

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That’s Not How It Goes

canine_side-eyeI am a huge sports fan. Huge. It is just about the only time that I tend to watch live television. The drawback, in my opinion, is that I have to watch all the ads on television, even the ones that get on my nerves. It is a sacrifice I am willing to make in order to get my game in real-time but, sometimes, I wonder. We are in the midst of basketball and tax seasons and the two have, apparently, come together to try to give me an aneurism or, at the very least, high blood pressure. You see, there are a variety of tax preparation related ads, declaring that it is time to get the mountains of money due to you and how easy it is to just do it all yourself, while you’re at it. I just hold my head and mutter, “no, no, no, no!”

Ad after ad trumpets that the product advertised will get you the largest tax refund around. So, what happens when you file your taxes and you don’t get a big refund; maybe you don’t get a refund at all? Do you get upset? Do you feel that your tax preparation software or professional has done wrong by you? But a refund is the government paying you back money that you overpaid them in the first place. Getting a large refund doesn’t mean that you lucked out and won the government lottery; it means that, over the year, you sent the government too much money and now the money is sending that money back to you, interest free.

Refund tales aside, there is the matter of how complicated the tax code is, something that even the Internal Revenue Service (IRS) writes about. The 2014 Tax Guide, a publication that the IRS puts out to help guide individuals who are filing their taxes is a daunting 288 pages long and that’s before the references in the guide for further information on the subjects covered. So, I am sure you can begin to understand my frustration when I see ads that imply that preparing a tax return is as simple as baking a cake. It is unclear how long the tax code is currently, but what we do know is that it gets longer and more complicated by the year.

Computer software is incredibly helpful, when it comes to tax preparation. However, it is paramount to keep in mind that the software is a tool and it will not automatically make you an expert, knowledgeable of the ins and outs of the tax code. If your tax return is straightforward, the chances are that you will be okay filing your own return. Say, however, that you have a business; do you know which of your expenses are deductible and which are not? If you are married, and you decide to file separately, instead of jointly with your spouse, do you know what the differences are between the two? What about if you have spent the year speculating, buying and selling assets, or if you gambled a lot and have significant winnings or losses? The software can only work with what you give it and what if the software doesn’t ask you the right questions in order to get as much information needed in order to have as accurate a tax return as possible?

At the end of the day, the IRS holds you responsible for errors in your tax return and the amount of taxes you pay (and what you claim as a refund). The last thing you want is to be hit with a notice telling you that you owe the IRS a bunch of money because, when they do that, they tend to also charge you interest and penalties. Some tax preparers will tell you that they will cover only penalties and interest due to errors on a tax return, but what about the erroneous tax refund that you have already spent? Yup, only you have to deal with that. It seems like the punishment is a lot worse than just messing up a cake recipe, right? So, I’m thinking that getting a qualified professional, such as a CPA, to prepare your taxes might be worth your investment. Don’t go with someone who promises you the largest refund; go with someone who has studied the law and takes continuing education to stay up to date on the intricacies of the tax code and not only how you will be affected federally but also on a state and local level. Yeah, state and local – I didn’t even go into all that. Find someone who knows what they are doing and who can tell you what is going on and why. Or, you could try to tackle the bigger than the bible tax code and do it all yourself. You’ve got time, right?

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