By: Jim Keeslar, CPA

“Trust but verify.” Three simple words. Fourteen letters. Pretty basic, but oh, so important, especially in the times we find ourselves in. In the last five years we have seen greed topple some large corporations and some seemingly powerful individuals. Now during a prolonged recession, we at BCG & Co. have seen a significant uptick in fraud. And I am not talking about stories in the newspapers about someone somewhere else. I am talking about right here in Akron, Ohio! We have seen use of corporate credit cards for personal expenses, the altering of documents to support invalid expense reimbursements, checking account theft, the theft of corporate funds meant for retirement funding and fictitious numbers being reported to a bank. Five different fraud schemes in the last three months alone! Years ago, there was a time when we would go a year or two before investigating a potential fraud scheme. So why so much activity now? Well, the economy has put a great deal of additional pressure on individuals causing them to do things they wouldn’t have thought of before.

For more on this whole topic, I have to look no further than our own “fraud-buster”, Ray Dunkle, who is a Certified Fraud Examiner (Ray also provided me with the title for this article). Ray noted, “many people think, ‘it won’t happen to me.’ Then before you know it, you hear them saying, I can’t believe it! He has been a long-time employee, a great performer. I never thought he would steal from me!” Ray goes on to say, “you don’t hire people expecting them to steal from you. You have to have some trust, but you must also be skeptical”.

So as an employer or board member, what are you to do? Again, I turned to Ray. “First, and foremost, make sure the organization has adequate internal controls. Controls are not just for large companies and you can’t be too small for some form of controls. Proper internal controls can help deter and detect theft. An audit is helpful, but it doesn’t always detect fraud. We are seeing more companies that are implementing internal audit procedures—either themselves or contracting with firms such as ours. Controls are important, but you want to perform periodic tests of those controls to make sure they are functioning properly. Internal audit procedures will do just that.”

I asked Ray for a closing thought and he said, “You know, companies will spend money on fire insurance or general liability insurance hoping they will never need it. Companies need to understand that spending money to prevent fraud and to detect honest, but costly, mistakes is no different. Putting controls in place or having internal audit procedures performed on a periodic basis will have a cost associated with it. But just like a fire, if theft hits, it will be more costly than what you would pay to “insure” against it. I would also add, trust is not a control, but a feeling. It is ok to trust, but remember to verify!”

Mark: Tuesday, May 26, 2009: Day 11

Today we met with Joshua Holyak from the IT Department. He helps people with their everyday problems and questions about their computers and software. On a daily basis, he receives around fifteen to twenty help requests from people throughout BCG &Company per day. Some days he may only receive half as many, though. When he is not helping people with their computer problems, he is working with the servers or other new technology that BCG&Co. receives. Because BCG Systems is a partner with Microsoft, they are able to acquire new software way before it is even on the market. For instance, they had been running Microsoft Outlook over a year before it was available for consumer use. This allows BCG to be at the forefront of updating and improving business technology. A lot of what Josh said was way over my head when he went into some of the specifics of what he does, but he did a great job of giving us an overview of his duties.

Another improvement is that certain departments have received laptops so that they will be able to work from home if necessary. This way, the employees can complete their work at home if they need a break from the office. Also, if someone is sick, they can still check on things at the office to stay in the loop. Part of Josh’s job is to encrypt these laptops so that if they are stolen, no private data will be lost or compromised. In fact, if someone loses their laptop and the files are not encrypted, they must contact every single client whose files are on the computer to let them know the situation. Therefore, Josh’s job, even though most people do not understand it at all, is very important for ensuring the security of the clients’ information.

Mark: Wednesday, May 27, 2009: Day 12

Today we visited with Jason Winchell and Albert Masco in the Audit Department. Albert took me to an audit. For every audit there is one person who does the initial auditing of the company. This is done by compiling the financial statements that the company provides them with and checking it to make sure everything is in order. The auditor must ensure that all the transactions are valid and accounted for. For example, when they look at the income statements from that year, each transaction of funds to and from the specific company must have an explanation. This could be in the form of an invoice or a check from the bank.

Abby McMullen, who performed the initial auditing, has to have her work checked by someone who may have more experience in auditing. Albert, who is checking Abby’s work on this  project, hands the audit over to one last person to perform the final check on the audit before it is presented to the company. The final check is usually performed by one of the partners of the firm, such as Dave Brockman. The extra effort put in by the auditors ensures that the audit is completed thoroughly and without mistakes. BCG&Co. deals exclusively with non-public companies, and these may ask for an audit if their bank requires them to. Also, they may ask for an audit if the company wishes to present financial information to clients that has been reviewed by a third party, such as BCG&Co. This makes sure the information is accurate and bias-free.

There is a lot that goes on in auditing that I do not understand, such as how they arrive with all of the recorded numbers in the income statements. Fortunately, I believe that with some college classes on the topic, I would be able to understand the inner-workings of auditing much better than I do now. One of the reasons that I think I would enjoy auditing is that it is not easy right away. It requires thinking on a higher level, and to be able to do that, one must be serious about school and the commitment to their profession. Also, I enjoy the fact that auditors do not always sit behind a desk and stare at a computer screen all day. This would not be too bad because the computers are used for a lot of interesting programs, such as tax work, but I do enjoy meeting new people and communicating with clients. The social aspect and job security of auditing really draws me to this field.

Aaron: Senior Experience Day 10- Friday May 22

Today I met with Emily Zaubi who is a member of the tax department in the firm. She did a very good job of keeping her explanations about her job generalized so I was able to understand what she does daily and how tax returns work. This is a challenge for me to understand everything about different departments in the firm and what their job requires since I haven’t had any accounting classes yet. Everyone has done a great job in explaining their specific job requirements to me. I now see how different tax and audit are, which is something I wanted to learn during my senior experience program here at BCG&Co.

I then spent the rest of the day working on a scanning project for Sarah. I have been scanning employee resumes into the computers for many different job positions. The meeting with Emily this morning was very helpful because I learned a lot about the tax department without getting overwhelmed with all of the information. I now know about the two main areas of accounting and have seen the pros and cons of each side. I didn’t know much about either before my senior experience, and it was one of my goals to learn about them during my three weeks here. Each department is interesting in its own way and I am not sure which I would choose to work in.

Aaron: Senior Experience Day 11- Tuesday May 26

This morning I met with Josh Holyak from the IT department. He told me about what his job involves, which is mainly with the computer network. Josh makes sure that all of the employees are able to access the network without any problems. This promotes efficiency within the company so everything runs smoothly. If an employee does have a technical problem, they contact Josh through a system called the Help Desk, where he will be notified electronically, or they can use the company’s phone system. Josh says he gets anywhere from 5 to 15 Help Desk requests per day and they range from not being able to print to being randomly disconnected from the network. He then showed me the server room and explained the process of virtualization to me, which is pretty confusing. Basically it is trying to get one server to do the work of multiple others. After I met with Josh I continued to do more scanning work for Sarah.

Josh has a very important position in the company and has much responsibility to keep things running smoothly. Many employees recently received laptops so they would be able to work from home and also when they are out at a client’s site they will be able to access the BCG network. Josh must constantly adjust to new changes in computer technology. I have noticed that all of the other departments must also deal with constant changes in the way they do things, which shows that even after college I will have to constantly be learning new things.
Aaron: Senior Experience Day 12- Wednesday May 27

For most of the day today I was with Jason Winchell of the audit department. Jason is also a former Miami student, so we instantly had a common connection. Jason did a very good job of explaining what his job requires without overwhelming me with all of the information. He showed me the company’s accounting software and how it links/organizes the client’s financial information to make his job more efficient. He explained that sometimes a client doesn’t categorize their accounts very well, so that tends to make his job more difficult but more interesting as well. He showed me some of the work he was doing for various clients, such as their 401K’s and ESOP’s. He typically is working on about four clients at one time and is able to develop relationships with them as he does their auditing work for a number of years. Forming relationships and connecting with more people is definitely a plus in the business world. I then went to the Olive Garden with Jason and Albert Masco.

Now that I have shadowed both audit and tax departments and have learned all that I can since I haven’t had any accounting classes yet, I still am not sure which area I prefer. Each has its pros and cons. Auditing involves forming relationships and some traveling which gets you out of the office, but sometimes clients aren’t very organized with their financial accounts. Tax mebers get the numbers from the auditors and do the tax returns the same way every time, which allows them to become more efficient at their jobs. However, they will spend a lot of their time in the office. My time at BCG&Co. has gone very quickly and I am very thankful for the experience I have had.
Aaron: Senior Experience Day 13- Thursday May 28

This morning I attended a client meeting with Ray Lampner. I knew that there were going to be some other Walsh students at the meeting, but I didn’t know that they were going to be the actual clients. Four of my classmates came to Ray because for their senior experience they are going to start a business. One girl’s father already had the plans for the business laid out a year ago, and now his daughter and the other students are setting it up by themselves. I found this choice to be very interesting but also extremely demanding at the same time. Ray went over all of the forms they would need to fill out once their business was started, such as K1s, payroll taxes, and a balance sheet. He also offered them some advice to make the financial management aspect of their business easier.

Later on in the afternoon I attended another client meeting with Ray. His clients were interested in opening up a UPS franchise store. Ray met with them to show them some financial projections for their business and to see how things were progressing. I was amazed at how much even a little change in cost for a company can affect their potential profit significantly.

Today was very interesting because I learned what accountants typically do in a Merger and Acquisition client meeting. Mergers and Acquisitions was something that seemed very interesting to me when I looked at the BCG website, so it was very beneficial to have had that experience. The way that Excel is used to created financial projections is very fascinating also. There are so many things that a potential business owner needs to be aware of, and it can easily become very overwhelming. It was nice to see some of my classmates this morning too and to learn what other students have been doing for their senior experience.

Senior Experience Day 14- Friday May 29

This morning I met with Jim Krosky, who is the Human Resources Consultant here at BCG&Co. He explained the various consulting services he performs for other companies. He also said that HR is similar to accounting because ever company needs it is some different form. He gave me some very beneficial advice on how to become involved in college either by internships and co-ops or through joining a good fraternity and developing my leadership skills. He said that as much face time I can get with companies the better because it will help me get a job in the future. I then went out to lunch with Sarah to Rockne’s for my last day here at BCG&Co. Once I got back to the office, I filed some paperwork until I left.

The meeting with Jim this morning was a great help because I learned what I should expect to do in college in order to connect with companies through an internship or co-op. probably the best piece of advice he gave me is that I can’t expect opportunities to come to me, rather I have to go out searching for them. This three week program was extremely beneficial and I learned a lot of valuable information that I will be able to use in the future. I would like to thank everyone I met for taking time out of their day to make me feel comfortable and welcome here and also telling me about their jobs. I greatly enjoyed this experience and will definitely try to keep in touch through college. All of you have been extremely friendly and helpful and I can’t thank you enough.

Mark:
On Thursday we went on a client lunch meeting.  Three auditors, Julie Moldvay, Elisa Burchett and Elizabeth Reidy, took us to the planning lunch for the audit they were going to perform. It was an incredible learning experience because not only was it the first time I had ever been in the client’s building, but also, we learned a lot about auditing.  We got to see how the business deals with its finances, how it plans and implements financial goals, how it deals with investors and endowments, how the auditors come into play when helping the company, and how an audit is actually planned out.  This was very interesting to me because I had really never learned any of this before.  It was very fun to attend this client meeting because it was an important part of what an auditor does, and everyone was extremely nice.

The auditors that brought me to their meeting were great and the COO (Chief Operating Officer) from the organization was very kind and informative.  I know for a fact that I would not have learned as much as I did if the meeting environment was more intense and stressful.  I realized that maintaining client relations is very important to really any business.  For example, if BCG did not keep such a good relationship with the client, then audit proceedings would not go as smoothly.  It is much easier to agree and to do business with people that you trust and are friends with. Client gatherings, even informal lunch meetings, can be just as important to a company as spending time working at a desk.  This is because out in the field, building relationships and possibly new client opportunities, an employee is making money for their company by creating new venues to do business in.  The client meeting today was beneficial to me because I received a better understanding of how to conduct business while still being friendly and cordial.

Aaron:
I spent the majority of the morning working on a scanning project for Sarah. I went through numerous employee resumes for different positions and scanned them into separate files in the computer. I think that the process of going paperless as a company is extremely beneficial for the employees because they can easily find any document they are looking for. Later on in the afternoon, I went on a client audit meeting with Julie Moldvay, Elisa Burchett, and Elizabeth Reidy.

This meeting was very informative because it showed me what members of the audit department typically do when they are with one of their clients. It was interesting to see how the two sides must work together so that the auditor knows as much about their client’s company as possible in order to do their job efficiently. Each experience I have had with the different departments within the firm has been very beneficial because I am learning about many different areas that I didn’t know much about. Everyone has been extremely nice and helpful and I thank you for taking your time to teach me about your jobs and to make my senior experience that much more valuable and enjoyable as well.