FRAUD EXAMINATION ALBRECHT, ALBRECHT,

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FRAUD EXAMINATION ALBRECHT, ALBRECHT, ALBRECHT

• Fraud Against Organizations

Chapter 15
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Learning Objectives

1. Recognize the various ways in which employees,
   vendors and customers can steal assets.
2. Describe the nature of thefts of cash through
   larceny, skimming, and fraudulent disbursements.
3. Explain the nature of thefts of inventory and
   other assets.
4. Understand the nature of bribery.

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Review Some Common Fraud Statistics
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Define Asset Misappropriations
Employee Alone Customer Alone Collusion
Employee Alone 2 Employees Together
Employee Alone Vendor Alone Collusion
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Match Definitions.
Delaying the recording of payments, record
tomorrows payments as todays
Larceny
Skimming
Stealing cash before it is recorded
Lapping
Stealing cash thats already recorded
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Define Describe Check Tampering.

• Preparing fraudulent checks or intercepting
  changing checks for someone elses or personal
  use
• Create a false company submit false invoices
  for payment
• Forging signatures, payee, changing amounts

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What Are Three Common Cash Register Scams?
1. FALSE VOIDS
2. FALSE REFUNDS
3. OVERSTATE RETURNS
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Describe How Billing Schemes Work. COMMENT.

• Set up Dummy Company Submit False Bills
• Alter or Double Pay Invoices
• Make Personal Purchases with Company Funds
• Common Expensive
• Median Loss 250,000

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Review Expense Schemes.

• SUBMIT FALSE DOCUMENTATION
• FOR REIMBURSEMENT
• Mischaracterized Expenses
• Overstated Expenses
• Fictitious Expenses
• Submit Same Expenses More Than Once

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Review Comment on Payroll Scams.

1. Ghost Employees
2. Falsified Hours Salary
3. Commission Schemes
4. False Worker Compensation Claims

Largest Losses 275,000
Most Prevalent 55.4
False Injuries Collect Insurance
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Inventory Other Asset Frauds Occur What 2 Ways?
1. Misuse of an asset. Asset used for personal
use.
2. Theft of inventory and equipment.
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Comment on 4 Types of Corruption.
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Define Discuss Bribery.
Offering or giving something of value to have an
official or commercial act performed
KICKBACKS Attacks Purchasing
BID RIGGING Falsifies Competitive Bidding
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What is Conflict of Interest?
If disclosed in the open- cant be conflict of
interest Purchasing or Sales Schemes
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Define Extortion Illegal Gratuities.
Employee telling a vendor pay me or your company
loses
Employee receiving Illegal tips or products
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Terms Match
Deceive someone to put money into a fake
investment
Economic Extortion scheme
Disbursement Fraud
Fictitious entity created to commit fraud
An employee demanding from a vendor in order to
influence a decision
Dummy or Shell Company
Investment Scheme
Paying for something or paying too much for
something it shouldnt
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Terms Match
Paying off or bribing public or company
officials in order to get preferential treatment
Bribery
Stealing cash once it has been recorded in the
records
Corruption
Another name for frauds committed against an
organization
Larceny
Offering, giving, receiving, or soliciting
anything of value to influence an official act
Misappropriations
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Terms Match
Stealing cash by preparing fraudulent checks or
intercepting checks made payable to others
Bid-rigging Scheme
Employees assisting vendors in winning contracts
by providing some kind of unfair advantage
Check Tampering
Embezzling a portion of the cash receipts of an
organization
Illegal Gratuities
Payments made to reward favorable decisions
payment is made after the deal is approved
Skimming