I spy a fraud! The face of auditing has changed as business owners face increasing temptation to bend the rules in an attempt to survive the circumstances they find themselves faced with as a result of the recession. Whilst observing the usual routine checks, the vigilant auditor should bolt on some additional checks to get the true picture of a client. In a perfect world there would be a definitive check list for potential failure, fraud or loss; sadly no such list exists, however the following key areas can be a guide to impending client issues: INDICATORS OF FRAUD Is your client making more and more invoicing errors? Are invoices lacking the usual level of detailed information? Is there an increasing number of larger invoices? Is your client raising manual or handwritten invoices? Is your client slow to provide back-up paperwork when requested? Are more and more questions being referred to the MD or FD? Have there been many staff changes? Is your client cutting staff in the administration team? Is the level of credit notes increasing? Is there an increasing number of ‘one off’ transactions? Is your client taking more holidays? Is your client delaying audits or visits? Is your client far friendlier or far more hostile these days? INDICATORS OF INSOLVENCY Is your client requesting more and more overpayments? Is the rent being paid later and later? Have the aged creditors increased? Is the HMRC late to be paid? Is your client slow sending management accounts? Is the level of early payment discounts increasing? Have the turnover levels changed? Has the client recently tried to get an increase in the overdraft? COMMON SENSE CHECKS Does your client’s business fit with industry trends in the current climate? Do the average invoice values / prices seem out of the ordinary? Do the explanations the client gives you sound implausible? Is your client pushing for fast decisions? Is your potential customer putting you under pressure? Does it sound too good to be true?