Dealership Fraud and Forensics
Our forensic experts collect, analyze, and interpret data, thoroughly examining suspicious activity that may point to theft, misuse, and misappropriation of funds within a dealership. We work to protect our dealership clients by implementing controls to prevent fraud, investigating fraud or embezzlement if it does occur, and analyzing financial information to use in legal proceedings.
Due to their intricate operations, dealerships face inherent fraud risks. Theft can manifest itself in various ways, including embezzlement, larceny, identity theft, and wages, which, if done knowingly, can constitute fraud. At Withum, we partner with you to implement robust internal controls for your dealership that proactively thwart fraud. Our collaborative efforts emphasize vigilance, transparency, and ethical practices, potentially minimizing the risk of dealership fraud.
Dealership Fraud and Forensics Challenges and Trends
Withum has extensive forensic experience helping dealerships navigate fraud issues and decrease their overall fraud risk through numerous strategies, including but not limited to:
Implement strong internal controls within the dealership’s accounting department. These controls should cover daily transactions, including sales, repair orders, invoice payments, payroll, cash disbursements and cash receipts. Real-time access to accounting information helps detect fraud early in your dealership.
Ensure that tasks are segregated among employees. For instance, managing payroll, cash handling, and reconciling reports should be performed by different individuals. If staffing is limited, consider outsourcing certain dealership accounting functions to a third-party service.
Conduct background checks on your dealership employees and vendors. Use complex computer passwords that change frequently. Maintain security cameras to deter fraudulent activities. Let’s put together a plan and process together to ensure you are set for when a security situation occurs.
Perform random inventory counts throughout the year. Waiting until year-end for physical verification can lead to losses for your dealership. Detect discrepancies early to prevent theft. Let’s put together a plan for regular inventory checks to ensure you are covered.
Dealership owners should sign Accounts Payable checks only after carefully reviewing underlying data. They should also regularly review Accounts Payable aging reports to determine if payments were properly posted.
Leverage verification technology and establish an internal audit program. These tactics help identify gaps in controls and prevent fraud.
If your dealership suffers due to events like tropical storms (or other weather-related disruptions), or because of data provider outages (such as hacks), Withum can guide you through insurance claims and help mitigate the impact on your business.
Dealership Fraud and Forensics Services
- Contract Disputes: If your dealership faces a breach of contract, Withum can help you navigate the legal complexities and assess the impact on your business. Whether it’s delayed deliveries or quality concerns, negotiation and alternative dispute resolution (ADR) are key steps to consider before resorting to litigation.
- Business Interruption Claims: If your dealership suffers due to events like tropical storms or other weather-related disruptions, Withum can guide you through insurance claims and help mitigate the impact on your business.
- Shareholder Disputes: Withum assists in quantifying damages arising from disagreements among fellow owners, misuse of business funds, or improper asset usage. Their expertise helps resolve conflicts and protect your company’s interests.
- Commercial Torts: If improper actions lead to income loss (e.g., fictitious employee payments), Withum can address these issues and safeguard your dealership’s financial well-being.
- Intellectual Property: Withum protects your tradenames, trademarks, and other intellectual assets. If infringement occurs, they provide expert guidance.
- Bankruptcy and Reorganization: In financial distress, Withum offers restructuring solutions and other options to stabilize your dealership.
- Matrimonial Litigation: If an owner faces divorce, Withum serves as a trusted advisor during this challenging time.
- Employment Damages: Withum assists in employment damages litigation, including cases of wrongful termination and failure to promote.
Contact Us
For more information or to discuss your business needs, please connect with a member of our team.
