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These people seem to have a strange definition of "fraud". In the first two paragraphs, they list three apparent "frauds" and then note that they were detected
by XCabbage 8y ago
These people seem to have a strange definition of "fraud". In the first two paragraphs, they list three apparent "frauds" and then note that they were detected by analysing the receipts that the employees submitted. In other words, the employees freely disclosed what they were expensing, by the article's own admission. There's no explanation given of why the three expenses listed were illegitimate in any way; it seems reasonable to charge for the cost of having a kennel take care of your dog while you travel, and I assume the yoga and strip club were client entertainment for sales or marketing purposes. You can very reasonably disapprove of taking clients to strip clubs, of course, but doing so and then openly disclosing it isn't dishonest.
The only example of employees committing fraud - that is, gaining a personal economic benefit through dishonesty - is in the final three paragraphs. In that case, somebody billed steak as food for the office python when really they were taking it home to barbecue for their family. The rest of this article is deranged; these auditors, at least as they are portrayed by Bloomberg, seem to think that submitting an expense claim that they don't approve of, entirely honestly, is somehow magically "fraud". What the hell?
- tpxl 8y ago>You can very reasonably disapprove of taking clients to strip clubs, of course, but doing so and then openly disclosing it isn't dishonest. Doing so and then submitting the expense as a steakhouse is dishonest at the _minimum_.
- XCabbage 8y agoIf I go to a steakhouse and then a strip club, submitting all the receipts for the night under the heading of "steakhouse business dinner" seems basically honest. I'm assuming that's what happened, just because in my imagination a typical night out at a strip club starts somewhere else first. Maybe the version of events in my mind doesn't match reality, but the article doesn't explain either way. If you disagree, would you also consider it dishonest to submit receipts for the client's transport to and from the steakhouse under the same heading? Or drinks in a bar afterwards? If not, why not?
- CaptainZapp 8y agoActually yes. I would consider it in any case dishonest to cram an expense item into something different. Expenses are itemized for a reason. As an analog I would also consider it dishonest if a company fibs its accounts by booking items into different categories. There is usually no other reason then to hide an expense, which should not be there. If a company approves taking customers to strip clubs then there's no reason not to itemize it as such.
- AYBABTME 8y agoInconvenience/can't be bothered? Seems highly plausible to me and not that difficult to relate to. I hate filling my expense reports, I'd rather not have to pay stuff out of pocket in the first place.
- XCabbage 8y ago> If a company approves taking customers to strip clubs then there's no reason not to itemize it as such. Who says it wasn't itemized as such? We know nothing about how the expenses system in question works, and a hierarchical submission that looks like ------ # Steakhouse business dinner * Client taxi fare to steakhouse - $xxx * Steakhouse bill - $xxx * Strip club bill - $xxx * Client taxi fare to hotel - $xxx ------ with a receipt for each seems perfectly reasonable (to me; apparently you think that it's dishonest for 3 out of 4 of those items to be there) and is consistent with the nonspecific description of events in the article. Evidently, the employee provided enough information for it to be clear that this was a strip club bill, because the auditing system could tell that it was a strip club bill. In order to create a narrative of dishonesty, you're having to add in details that aren't specified in the article and seem to fly in the face of the fact that an audit looking purely at the information submitted identified that it was a strip club bill.
- jakobegger 8y agoThe story is about how AI helped discover fraud, so presumably it was not expensed correctly, but the all seeing AI went on the internet and discovered that even though the receipt is titled "Sams Fine Steak House", the address on the receipt from the limo company was a strip club. Or something like that.
- detaro 8y agoThe initial examples clearly list that the employees pretended the charge was for something else. One can reasonably argue the employer should consider covering those things, but the process should be honest on both sides. (Clearly tell employees what's covered, how to submit it and how to ask for clarification/extra consideration, in exchange for accurate claims)
- XCabbage 8y agoNone of the examples "clearly list" this. All of them permit this interpretation, but it's far from clear.
- dillondoyle 8y agoLol big local strip joint in Denver is also a 'steak house' (they serve some type of meat and call it steak) and now I'm wondering if expensing is the reason for it haha
- ambicapter 8y agoThey do it for anyone who might take a look at expenses: spouses, etc.
- gniv 8y agoI think you misunderstood. > One employee traveling for work checked his dog into a kennel and billed it to his boss as a hotel expense. I read this as "employee pretended that the kennel expense was a _human_ hotel expense". (And, presumably, the employee stayed with friends/family)
- XCabbage 8y agoI read it as "the expenses software requires expenses to be filed under one of a small number of categories, and the employee went for 'hotel' because it was the closest one available". I guess both interpretations are possible.
- scarejunba 8y agoHaha. Almost certainly what happened. If you want your people straining to figure out which category something is in then you're wasting their time. Should've used the tool to select the right category instead of making a human select a category and then dinging them for it. Then Finance can approve or whatever. The real thievery is the time expense software is stealing from the company by making people pick among all these categories. If it takes you an hour to fill in expenses, that task just cost the company half a grand.
- TeMPOraL 8y ago> The real thievery is the time expense software is stealing from the company by making people pick among all these categories. Oh yes. At my first workplace, I ended up using Emacs keyboard macros to convert from a bank statement dump to a format that could be imported into expense reporting system, and it took me less time than it would take to type in everything manually, because the system UI was so broken.
- ameister14 8y agoPossible, yes, but one requires multiple other leaps.
- Someone1234 8y ago
- rexaliquid 8y ago> by analysing the receipts that the employees submitted. The article implies that at least some of those receipts were faked.
- ballenf 8y agoThe article reads to me as a press release from the company with the barest of value-add from the author. There's a good chance this company had humans review the receipts and calls it "AI".
- puranjay 8y agoSlightly OT, but I wonder if you should be able to claim yoga/gym or even clothes as an expense. If being a consultant means projecting a certain image (fit, well-dressed), shouldn't you be paid for maintaining that image?
- ballenf 8y agoThe IRS in the US has rules that designates things as taxable income or not for many of these questions. Businesses can still reimburse regardless of IRS categorization, but you may be taxed on the reimbursement as income. To avoid that issue, most businesses will avoid reimbursing for incidentals that should be considered income. Suits or standard office clothing, I believe, are taxable in most circumstances. Uniforms are not. Of course there's lots of grey areas that keep accountants in business. I'd assume yoga would count as an exercise allowance and not be taxable, but that's just a guess.
- ghaff 8y agoSafety-related clothing is also deductible. When I worked in the oil business I could deduct things like steel-toed boots, overall, gloves, etc. off my taxes (or the company could have provided them for me as a business expense). At the same time, as you say, even if I only wear a suit for work, it's not deductible. Such is the simplicity of our tax code :-)
- deleted 8y ago[deleted]