Employers may disguise financial misconduct by incorporating wrongful actions into routine work tasks. Employees, for example, may receive requests to add falsified numbers to accounting records. Whistleblowers.gov notes that employees may report their employers’ unlawful practices without fear of retaliation. If asked to perform tasks that violate the law, employees may also save evidence to support a whistleblower claim.
The Journal of Accountancy describes how a sign of fraud may include loose internal controls. Financial reports showing exceedingly high-profit margins may also reflect a sign of corporate fraud. The figures presented may not represent accurate financial reporting.
Employee suspicions of fraudulent acts
As noted by the Corporate Finance Institute, fraudulent accounting procedures may reflect a company’s illicit pursuit of business loans or investors. Deceptive marketing materials may help attract investors who supply cash. Managers may ask employees to create and deliver exaggerated business presentations Inflated growth figures may prevent investors from withdrawing money.
Accounting.com explains that discrepancies in a company’s financial reports may reflect fraud. Employees may become suspicious after comparing internal records with public reports. Mismatched or irregular information may prove essential in a whistleblower’s complaint.
The federal government’s role in corporate fraud claims
As noted by Harvard Law School, the federal government has the authority to prosecute or dismiss corporate fraud claims. Cases with a higher likelihood of victory often involve claims against companies with ample profits or liquidity. Before blowing the whistle on a company, employees could gather receipts, statements or tax records that may help prove an employer’s deceit.
Evidence of fraud involving loans or investors could require an experienced legal team. Knowledge of complex financial matters may help make a difference in the outcome.