A Scam Email with the Subject "Subject: Why is the Company not making Profits ???" was received in one of Scamdex's honeypot email accounts on Mon, 31 Aug 2009 16:10:26 -0700 and has been classified as a Generic Scam. The sender was "Confidential Audits" <email@example.com>, although it may have been spoofed.
Dear Sir / Madam, We continue our investigations and are shocked by the level of negligence, carelessness and lack of discipline and policies of accounting being followed . We have now done the INTERNAL audit of 247 companies over the past 5 months ( we cannot reveal the names of our clients as this is done in total confidentiality ) . We are only happy that we could show a new path of transparency which has helped our clients . For the benefit of all our business community members , We only highlight here some of the disorders we found in these audits and which could be an eye opener to your business as well. The accounts of many companies are totally wrong . The owner is not aware of what is really happening and the Accounts and Finance Teams are totally confused , with no direction. The main areas of concern we found was:- 1.In many cases even a Basic Accounting policy of Preparing Vouchers is not made , or if made are not countersigned by any authorized person or / owners . 2.There are no , or insufficient supporting purchase invoices /cash bills. There are bogus invoices, dummy invoices, and many invoices and cash memos are simply repeated after a few months with changes in dates and cash is again claimed as expenses . 3.No quotes have been taken from at least 4 to 5 suppliers for purchases of the company and no attempt has been made to find out if any supplier discounts would have been possible or any better credit terms possible. 4.Stock is not maintained properly and there is a huge difference in the physical stock and actual stock .The method of calculation of landed cost is wrong. In some cases stock taking has not taken place for ages . 5.The gross profit and net profit percentages are no where near the market figures for similar lines of business. 6.There are too many cash expenses like mobile telephone call exps , taxi fare charges, freight charges , petrol expenses which are used for personal purposes by staff and no deductions or limits have been set . 7.Cash instead of cheques has been collected from debtors against company's Sales invoices and this cash has not benn deposited into the company's bank accounts or deposited after a few days only. 8.There are several old outstanding collections which should have been taken up by a simple collection notice but sales staff and accounts staff has not informed the true position of such debtors to the owners/ Directors or not bothered to report such defaulters to the legal system and it is too late now. 9.The method of calculation of staff incentive and commission is totally wrong putting the owner into heavy expenditure .The correct method used in a profit making organization would be to set a basic minimum sales guarantee for the salary paid and incentive only on the increased sales beyond this point . 10. There is no system of monthly reporting by accounts department to the owners with management reports of all accounts transaction activity and financial statements . No ratios of gross profits, net profits, working capital ratios, stock number of days ratios or debt collection days ratio or no such important ratios are used. 11.Owners are not sure whether the financials given to them by the accounts department are really correct and does it really show the true position of the company as the accounts department keeps producing statements with different figures in a matter of just a few hours each day , just to please the owner that's everything is going fine , whereas it is not . .......the list goes on and on ..........The owner and the sales team are working so hard to get business for the company , but with such secret leaks and losses the end result is not satisfactory. Something drastic needs to be done to bring this under control before the next boom begins. THIS IS WHERE WE CAN HELP. We will do a complete internal audit .(not the usual audit we all know !!! ) This is a special confidential audit we do for the owners to find out the exact problems in the business through its accounts which will reflect the actual health of the company ). We will prepare a complete accounting and administration manual for your company and ensure it is being strictly followed. There will be no chance of any loopholes in the system. We can also guide your accounts staff on how to then follow the accounting and admin. manual and its policies and we can keep a double watch on what's happening by undertaking regular visits till the accounting part is fully in control, systems and procedures are in place and you are satisfied that the business is REALLY under your control. If your accounts are in full control then we can still add value , to assist you with a regular internal audit to monitor that this control is maintained at every moment in the company. We thank you for your time . We believe that business should do well ( or else why should we start our own business in the first place !! ) and for this certain tools are required to make sure we are on the driving seat and thats where we can help, to show you where the business actually stands and where it is heading to and take corrective measures asap . Please send us an email in confidence and we will contact you immediately. Best Regards The Audit and Finance Consultants Team firstname.lastname@example.org