Fraudsters often display certain warning signs or red flags that they are engaging in illicit activity.

In some cases, the Fraudsters are living beyond their means and in other cases, the fraudster had been experiencing financial difficulty.

With fraud, corruption, and bribery being so prevalent, it has become more and more necessary for companies to understand and perhaps implement lifestyle audits as a prevention method to crime.

The lifestyle audit is considered by many to be a valuable method in uncovering irregular income and is thus been called for by many sectors of business and government who believe they are necessary to expose cases of fraud and corruption.

But what is a lifestyle audit?

Simply put, a lifestyle audit is an amalgamation of reports from a variety of databases which provide management, as well as investigators, with a snapshot into certain aspects of the life of an employee. Lifestyle audits are legitimate fraud prevention and detection mechanism. A lifestyle audit mainly takes account of the properties, motor vehicles, and credit record of the individual to obtain a clear picture of the individual’s financial circumstances. The results of a lifestyle audit are in no way conclusive; however, it does serve as an indicator to show management or investigators if an individual is potentially engaging in illicit activities. A lifestyle audit is defined as a person’s living standards to see if it is consistent with his/her reported income.

According to the Association of Certified Fraud Examiners, any recipient of funds, whether honest or suspect, has only four ways of disposing of income: save it, buy assets, pay off debts, or spend it. This provides information to the forensic investigator on where to start searching for possible evidence in a suspected case of fraud, including an investigation into the background of a suspect.

As part of our background research we look at the following:

  • Directorship in legal entities;
  • Movable assets;
  • Fixed assets;
  • Financial background check regarding judgments, defaults, debt review, etc. 
  • Consumer enquiries.

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