Forensic Accountants Help Manufacturers Meet Challenges
Litigation support, internal audit, and business resiliency services for manufacturers
American manufacturers face myriad challenges, which they can only overcome if they receive better information. At North American Forensic Accounting, our professionals draw on decades of experience to analyze data with greater insight, detail, and purpose. At NAFA, we understand that to provide top quality services we need to be knowledgeable about the industries we serve. While our leaders already have extensive experience in the manufacturing sector, we have also invested in resources that enable us to stay current on trends and risks that impact manufacturers.
Reliable loss calculations to help your business rebound
Supply chain disruption can cause a ripple effect that cripples a business. Fraud, natural disasters, breaches of contract, employee embezzlement, and work stoppages can all disrupt your ability to fulfill contracts. But how much damage has been done to your bottom line? If you’re hoping to recover on a business interruption claim or a liability lawsuit, NAFA can help conduct assessments of losses. Our analysis may include:
- Determining the loss period
- Identifying the components of the damages
- Measuring how the use of alternate locations, suppliers, or processes impacted profits
- Determining if there is customer ill will and the potential for future lost profits
- Quantifying the damages for other losses such as personal property
Our NAFA team scrutinizes every pertinent factor that contributed to a loss of profits. We present you with a detailed report to support your insurance claim or litigation. We can also provide confident and cogent testimony as expert witnesses to bolster your case.
Thorough business valuations and quality of earnings reports
How much is a manufacturing business worth? This is a complex question requiring close examination of financial performance, the reason for the valuation, numerous risk factors, what similar companies have sold for, and much more. At NAFA, our forensic accountants know how to analyze the hard data to produce a firm valuation of a manufacturing enterprise.
For even deeper insights, we delve below the top-sheet of the financials to produce quality of earnings analysis that assesses how the company makes money and whether performance is likely to continue. We examine existing contracts to determine if the client base is sound enough to depend on for future orders, the cash flow from operations, and concentrations of customers and vendors, as well as many other aspects of the business. At NAFA, our forensic accountants know how to analyze hard data, but we can also evaluate the human element because there are also human factors to consider, such as the availability of skilled labor and the quality of management. Whether you are thinking of buying or selling a manufacturing facility, NAFA’s reporting gives you a solid basis for negotiating the transaction.
Internal audit professionals supplement your staff to complete SOX testing
Our firm is comprised of certified experts in internal audit with extensive experience in SOX compliance. Our veterans can help supplement your staff, so you can complete your testing in the time allotted without having to go through the process of filling a salaried position. Our internal audit professionals frequently use SAP, the world’s leading enterprise resource planning software. Our team is also experienced in different audit and compliance tools such as HighBond and AuditBoard so little or no training may be required on your end. Let NAFA help relieve some of the stress related to completing your SOX testing.
Business resiliency services facilitate risk management
In an increasingly uncertain world, manufacturing facilities are vulnerable to a wide range of events that could bring their operations to a standstill. Natural disasters, fires, power outages, supply chain disruptions, cyber-attacks, work stoppages, labor shortages, and active shooter incidents are just some of the events that could disrupt your operations. Do you have a plan to continue operations in the wake of a crisis? NAFA can help you design a plan that allows you to minimize interruptions and their consequences for your business.
The warning signs of fraud in manufacturing
If you are a leader of a manufacturing concern, you may suspect fraud on the basis of certain telltale signs, such as:
- Inventory that is inexplicably shrinking
- Cozy relationships between outside vendors and your staff involved in the procurement process
- Invoice issues, such as unusually high volumes, inflated pricing, or multiple payments to specific vendors
- Poor performing vendors having contracts renewed pro forma
- Abrupt rise in customer complaints about the quality of your products
When you see any of these warning signs, and your own people can’t provide a satisfactory explanation, it’s time to call the forensic accounting experts at NAFA.
Common types of fraud in the manufacturing sector
Companies with lax business process controls are inviting fraudsters, from inside and outside their organization, to help themselves to company assets.
Common types of fraud against manufacturers include:
- Inventory theft — You know how many units you produced and how many you shipped, but what’s left in storage does not equal the difference. Someone has been making off with your product.
- False billing — Inflated invoices, invoices from fictitious vendors, invoices for goods/services never ordered and never received.
- Collusion and corruption — Bribery, conflicts of interest, and kickbacks all work against company interests for the benefit of a dishonest insider.
- Counterfeiting — Someone is knocking off your product and selling it as genuine. This can lead to serious customer frustration and headaches for your returns department.
- Trade secret theft — A disgruntled former employee has taken your proprietary secrets and is using them unlawfully to produce a product to compete with you.
The proper controls can reduce your vulnerability to these attacks, and help you take decisive action when they occur. Our NAFA experts can show you how.
Contact North American Forensic Accounting PC for loss calculations and much more
North American Forensic Accounting PC helps manufacturers manage a range of complex tasks, including quantifying losses, investigating fraud, reducing the burden of Sarbanes-Oxley compliance, and helping manage risk with business resiliency services. To learn more, call us at 347-286-4860 or contact one of our offices online to schedule an appointment. NAFA serves clients from offices throughout the United States, including in Philadelphia, Pittsburgh, New York City, Atlanta, Charlotte, Miami, and the Tampa Bay Area.