Are prospective borrowers telling the truth? Learn the warning signs associated with deception
Abstract: Most borrowers respond honestly when they meet with bankers about their financial condition. But those with less than stellar records may be tempted to downplay their true economic situation. Lenders need strategies to help them determine if a loan applicant is telling the whole truth. This article offers some forensic accounting tips for uncovering exaggerations, misstatements and outright fraud when managers are suspected of dishonest behavior. A sidebar lists several questions lenders should ask if they are concerned about potential inconsistencies — or deception — on the part of their borrowers.