Social Media Can be a Valuable Tool in Forensic Accounting

Forensic accountants often use sophisticated software packages, word processing programs, and mountains of professional practice aids when working on forensic cases. Such resources are necessary, but can also come at a hefty price. There’s a not-so-new and inexpensive tool available for practitioners in this field that can be just as useful as any of the items I just listed: social media. Yes, Twitter, Facebook, and LinkedIn can be just as valuable as Microsoft Excel when working on any variety of forensic cases.

Here’s an example:

Suppose a client comes to you with the suspicion that an employee is receiving kickbacks from Vendor A. You pour through the company’s accounting records often noticing this vendor, but you don’t see it listed in the employee’s personal records. However, you notice the employee is receiving fairly regular payments from a company other than his or her employer – let’s call it Company B. This could be suspicious, but you have no proof of wrongdoing from the information you’ve received. Try typing that employee’s name in the search bar on LinkedIn (or Facebook). Sometimes you can see the person’s entire profile, his or her connections, and the profiles viewed by other LinkedIn users who have looked at the employee’s profile (this depends on the person’s privacy settings). You find the employee you’re investigating, and he/she lists Company B as a former employer – so why is he/she still receiving payments from that company? After looking at a few of the employee’s connections, you discover that Company B is owned by the same person who owns Vendor A. Hmmm…

Suspicious? Yes. Proof of the employee receiving kickbacks? Not necessarily.
Fraud by its very nature is meant to be concealed, and can be very difficult to prove. This is merely a red flag, a piece of evidence, and something either the client or legal counsel can use to confront the employee. This information may not have been known by the client prior to the investigation, and could be the very piece of information that gets the employee to spill the beans.

Exercise professional judgment if you choose to use social media in your next case. Never pretend to be a person you are not, and be sure to protect yourself with appropriate privacy settings.