How to Use This Guidebook

01The method, before the schemes

This guidebook is written for the partner or co-owner who has begun to suspect that money is leaving the business in ways the books do not explain. It is not legal advice and it is not accounting advice. It is a control framework, written by an auditor, for the person inside a closely held company who is closest to the paper and furthest from the truth.

Every scheme in this book follows the same arc: a transaction occurs, it is disguised as something ordinary, and the disguise holds only as long as nobody compares two records that should agree. Your job is to make those comparisons. The method is four steps, always in this order.

• Observe — catalogue what you can see without asking permission.
• Verify — confirm what you observed against an independent record.
• Document — preserve the evidence before it can be altered or deleted.
• Act — escalate to counsel and a forensic accountant, never alone.

02The partner's advantage

A partner is not an outside auditor. You already know the business, the customers, the vendors, and the rhythm of the cash. That familiarity is your single greatest detection tool — and it is also the reason a fraudster will work to keep you out of the records. The moment you are told you would not understand the details, treat that sentence as a finding.