Transforming organizations through skillful alignment of people, process and technology.
The Hilltop Companies


Fraud Risk Assessments

The Hilltop Companies has created a proprietary fraud risk assessment methodology.  Our process assesses whether your Company’s fraud efforts (policy, process, controls and technology) will help prevent, detect and mitigate fraud risk across the enterprise.  The process identifies areas that exhibit high fraud risk potential.  Our fraud risk methodology assesses the Company’s fraud efforts as follows:

  • Company identified types of fraud that could occur (embezzlement, financial statement, financial misrepresentation, mail fraud, inventory fraud, fraudulent loan ratings, fraudulent trading activities, etc.)
  • Fraud policy to prevent such occurrences,
  • Organizational assignments to identify specific senior management responsibility for fraud risk management,
  • Processes and controls implemented to prevent and/or identify fraud,
  • Testing of fraud controls,
  • Mock fraud events used to test the Company’s preventive and detective efforts
  • Monitoring and reporting to detect/identify evidence of a fraud
  • Action plans to diminish the impact of a fraud once detected
  • Management’s response to past frauds (communications, actions taken, new controls, etc.)

As a result of this assessment, Hilltop will identify any enhancements to the Company’s fraud risk management and control efforts.  We can also assist you with the implementation of such policy, process, controls, personnel and technology changes to ensure that once in place – these changes can be effective in the prevention, detection and mitigation of fraud.

View our detailed capabilities for conducting a fraud investigation. If a fraud has already occurred, we investigative audit process can be deployed to determine the following:

  • Depth of the fraud (corporate or department wide or type of transaction, etc.)
  • Impact of the fraud (cash missing, financial misstatement, etc.)
  • Any immediate process changes required to prevent further issues
  • Any special monitoring needed to assess the unknowns (not knowing who was really involved in the fraud execution, how exactly the fraud was executed, and any other issues not yet resolved)
  • Processes used or likely used to commit the fraud
  • Any recommended changes to controls, responsibilities, business processes, oversight and monitoring, possible technology to mitigate the risk for further similar fraud

Critical to any fraud risk assessment and/or fraud investigation, is the constant communication with the Company’s leadership to update them on the status of the fraud investigation and mitigation efforts.  These parties include:

  • Board of Directors
  • Audit Committee, if applicable
  • Selected management personnel – usually a small group
  • In House counsel
  • External counsel
  • Law enforcement or SEC as needed

Given our significant experience with different types and numbers of frauds investigated throughout our careers, we approach the fraud risk assessment with a perspective that “anything is possible” and conduct our independent investigation accordingly.

We have worked with law enforcement authorities (FBI, State & Local police) to assist in gathering financial information to be used in trials/prosecution.  We have provided testimony and depositions in support of litigation activities related to the fraud or insurance claims.

Example fraud engagements include:

  • Financial restatements caused by errors, misinterpretation of GAAP or improper estimates
  • Litigation against owners of a lending entity for embezzlement
  • Fraud in loan origination activities where loan documentation is altered,
  • Embezzlement of cash from loan servicing clearing accounts
  • Reconstruction of transactions to assess money laundering transactions
  • Reconstruction of title company records for lost/stolen funds
  • Reconstruction of trading activities – mortgages, securities, derivatives, commodities
  • Calculation or re-computation of economic loss for litigation/insurance claims

Forensic Accounting Services are often required when the financial statements have been misstated by material amounts.  Often as part of the fraud, the “fraud architect” will create bogus transactions, caused reconciliations of certain accounts to go undone, use clearing accounts to hide temporary “resting places” for fraudulent amounts, etc.  When the accounting has been purposely mis-recorded, the accounting records need to be reconstructed.  Hence, a forensic accounting process will need to be implemented where transactions, data processed, and accounting entries may have to be recreated.

Other reasons for forensic accounting to be completed include when a company has “lost control” of its record keeping, has had a major catastrophe (fire, earthquake, flood, etc.) or systems’ crash.  Our experience allows us to quickly conclude on what needs to be done, who is critical to work with and how the results will be used.

The Hilltop Companies is well positioned to assist in the fraud risk assessment, investigation and mitigation activities given our strong audit and investigative service offerings.