Corporate Fraud Handbook

by Joseph T. Wells (Association of Certified Fraud Examiners )

• ISBN13: 9780471491217
• ISBN10: 0471491217
• Format: Hardcover
• Copyright: 2004-05-01
• Publisher: WILEY

Summary

Learn to spot the "red flags" of fraud and gain insight into the implementation of effective fraud preventation measures with this practical guide. In addition, you'll take an in-depth look at how to comply with recent regulations including Sarbanes-Oxley and take an insider's peek at fraud schemes used by employees, owners, managers, and executives to defraud their customers. Includes real-life case studies submitted to the ACFE by actual fraud examiners who aided in case resolutions. Order your copy today!

Author Biography

Joseph T. Wells is the founder and Chairman of the Association of Certified Fraud Examiners (ACFE) and a professor of fraud examination (adjunct) at the University of Texas-Austin.

Table of Contents

Preface	vii
About the ACFE	x
1. INTRODUCTION	1	(50)
Defining Occupational Fraud and Abuse	1	(4)
Research in Occupational Fraud and Abuse	5	(19)
The 2004 Report to the Nation on Occupational Fraud and Abuse	24	(27)
PART I ASSET MISAPPROPRIATIONS
2. INTRODUCTION TO ASSET MISAPPROPRIATIONS	51	(12)
Overview	51	(1)
Definition of Assets	51	(1)
How Asset Misappropriations Affect Books of Account	52	(11)
3. SKIMMING	63	(34)
Case Study: Shy Doc Gave Good Face	63	(17)
Overview	67	(1)
Skimming Data from ACFE 2004 National Fraud Survey	67	(6)
Unrecorded Sales	73	(4)
Understated Sales and Receivables	77	(1)
Theft of Checks through the Mail	78	(2)
Case Study: Beverage Man Takes a Plunge	80	(17)
Short-term Skimming	83	(1)
Converting Stolen Checks	84	(3)
Concealing the Fraud	87	(5)
Detection	92	(1)
Prevention	93	(4)
4. CASH LARCENY	97	(22)
Case Study: Bank Teller Gets Nabbed for Theft	97	(16)
Overview	100	(1)
Cash Larceny Data from ACFE 2004 National Fraud Survey	100	(5)
Incoming Cash	105	(5)
Cash Larceny from the Deposit	110	(3)
Case Study: The Ol' Fake Surprise Audit Gets 'em Every Time	113	(6)
Miscellaneous Larceny Schemes	115	(1)
Detection	115	(2)
Prevention	117	(2)
5. CHECK TAMPERING	119	(38)
Case Study: A Wolf in Sheep's Clothing	119	(27)
Overview	122	(1)
Check Tampering Data from ACFE 2004 National Fraud Survey	122	(6)
Forged Maker Schemes	128	(5)
Intercepted Checks	133	(1)
Forged Endorsement Schemes	133	(4)
Altered Payee Schemes	137	(3)
Concealed Check Schemes	140	(1)
Authorized Maker Schemes	141	(3)
Concealment	144	(2)
Case Study: What Are Friends For?	146	(11)
Detection	152	(1)
Prevention	153	(4)
6. REGISTER DISBURSEMENT SCHEMES	157	(18)
Case Study: Demotion Sets Fraud in Motion	157	(10)
Overview	160	(1)
Register Disbursement Data from ACFE 2004 National Fraud Survey	160	(5)
False Refunds	165	(2)
Case Study: A Silent Crime	167	(8)
False Voids	170	(2)
Concealing Register Disbursements	172	(1)
Detection	173	(1)
Prevention	174	(1)
7. BILLING SCHEMES	175	(28)
Case Study: Medical School Treats Fraud and Abuse	175	(15)
Overview	179	(1)
Billing Scheme Data from ACFE 2004 National Fraud Survey	179	(5)
Cash-Generating Schemes	184	(1)
Invoicing via Shell Companies	184	(5)
Invoicing via Nonaccomplice Vendors	189	(1)
Case Study: For This Magazine, Internal Fraud Proved Hard to Digest	190	(13)
Personal Purchases with Company Funds	194	(6)
Detection	200	(1)
Prevention	201	(2)
8. PAYROLL AND EXPENSE REIMBURSEMENT SCHEMES	203	(38)
Case Study: Say Cheese!	203	(19)
Overview	206	(1)
Payroll Scheme Data from ACFE 2004 National Fraud Survey	206	(16)
Expense Reimbursement Schemes	222	(1)
Case Study: Frequent Flier's Fraud Crashes	222	(19)
Expense Reimbursement Data from ACFE 2004 National Fraud Survey	225	(11)
Detection of Payroll Schemes	236	(1)
Detection of Expense Reimbursement Schemes	237	(1)
Prevention of Payroll Schemes	238	(2)
Prevention of Expense Reimbursement Schemes	240	(1)
9. INVENTORY AND OTHER ASSETS	241
Case Study: Chipping Away at High-Tech Theft	241	(17)
Overview: Non-Cash Misappropriation Data from ACFE 2004 National Fraud Survey	244	(6)
Misuse of Inventory and Other Assets	250	(1)
Theft of Inventory and Other Assets	251	(7)
Case Study: Hard Drives and Bad Luck	258	(15)
Concealment	263	(2)
Detection	265	(4)
Prevention	269	(4)
PART II BRIBERY AND CORRUPTION
10. BRIBERY	273	(32)
Case Study: Why Is This Furniture Falling Apart?	273	(22)
Overview	276	(4)
Corruption Data from ACFE 2004 National Fraud Survey	280	(5)
Bribery Schemes	285	(10)
Case Study: Keep Your Eye on the Salesman?	295	(10)
Something of Value	298	(1)
Economic Extortion	299	(1)
Illegal Gratuities	299	(1)
Detection	299	(3)
Prevention	302	(3)
11. CONFLICTS OF INTEREST	305	(16)
Case Study: Working Double Duty	305	(9)
Overview	309	(1)
Purchase Schemes	310	(2)
Sales Schemes	312	(1)
Other Schemes	313	(1)
Case Study: A Parasite Farm	314	(39)
Detection	316	(1)
Prevention	317	(4)
PART III FRAUDULENT STATEMENTS
12. FRAUDULENT STATEMENTS	321	(32)
Introduction	321	(4)
Fraud in Financial Statements	325	(3)
Major Generally Accepted Accounting Principles	328	(4)
Responsibility for Financial Statements	332	(1)
Users of Financial Statements	332	(1)
Types of Financial Statements	333	(1)
The Sarbanes-Oxley Act	334	(11)
Financial Statement Fraud Data from ACFE 2004 National Fraud Survey	345	(8)
13. FRAUDULENT FINANCIAL STATEMENT SCHEMES	353	(48)
Case Study: That Way Lies Madness	353	(14)
Methods of Financial Statement Fraud	359	(1)
Fictitious Revenues	359	(3)
Timing Differences	362	(5)
Case Study: The Importance of Timing	367	(30)
Concealed Liabilities and Expenses	368	(3)
Improper Disclosures	371	(2)
Improper Asset Valuation	373	(5)
Detection of Fraudulent Financial Statement Schemes	378	(17)
Prevention of Financial Statement Fraud	395	(2)
Case Study: All on the Surface	397	(4)
14. OCCUPATIONAL FRAUD AND ABUSE: THE BIG PICTURE	401	(14)
Defining Abusive Conduct	401	(1)
Measuring the Level of Occupational Fraud and Abuse	402	(3)
Understanding Fraud Deterrence	405	(4)
The Corporate Sentencing Guidelines	409	(2)
The Ethical Connection	411	(1)
Concluding Thoughts	412	(3)
Appendix: Code of Business Ethics and Conduct	415	(12)
Bibliography	427	(8)
Index	435