Detecting Fraud in Organizations : Techniques, Tools, and Resources

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  • Edition: 1st
  • Format: Hardcover
  • Copyright: 2013-01-29
  • Publisher: Wiley
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A savvy examination of where people and value meet, creating the opportunity for fraud An essential reference for all business professionals, Detecting Fraud in Organizations: Techniques, Tools, and Resources explains the process of how people commit fraud, as well as how to prevent and stop fraud from occurring in your organization. Organized by business processes which succinctly describe how fraud manifests itself on a daily basis, the authors explain ways in which everyone can help guard against fraud by familiarizing themselves with its building blocks and methods used to perpetrate and conceal it. Filled with situational examples the book is accompanied by a website featuring fraud simulations, business process maps, and other useful tools for combating fraud. Focuses on the people who perpetrate fraud and those who are tasked with preventing and detecting it Uniquely organized by business processes for more relevance and easier understanding by those people working within organizations Shows how subtle factors play a large role in identifying and ferreting out fraud in addition to the traditional knowledge of fraud schemes giving people and organizations the edge they need to be successful in prevention and deterrence Companion website includes additional fraud simulations, business process maps, and useful tools The price of fraud can be devastating to your business. Detecting Fraud in Organizations: Techniques, Tools, and Resources equips you and others in your organization with essential information and tools necessary to proactively catch fraud, reduce losses, improve efficiencies and develop actionable controls.

Author Biography

JOSEPH R. PETRUCELLI, CPA/CFF, FCPA, CVA, CFFA, PSA, CFE, is a founding partner of PP&D Accounting Services, Inc., and Fraud Forces, Inc., where he provides forensic accounting, tax, and consulting services, including testifying and preparing for trial as a qualified expert. He is also an adjunct professor teaching accounting and taxation-related courses, including advanced forensic accounting. He was part of the development team on the fraud risk management and detection certification curriculum of Consultants' Training Institute (CTI), a division of the National Association of Certified Valuators and Analysts (NACVA).

Table of Contents




The 800-Pound Friendly Gorilla

Numbers Don’t Lie, People Do

An Overview of Fraud

This Book’s One Minute Fraud Mysteries

A Few Tips for Detecting Fraud as You Begin

This Book’s Setup

Chapter 1 Understanding Fraud
What Is Fraud and Why Does It Continue to Happen?

People Are Greedy - How Greedy Are You?

One Minute Fraud Mystery: Trust Us, Inc.

Distinguishing between Deterrence, Prevention, and Detection

Increased Risk of Fraud Loss

Divergent and Convergent Thinking

Critical Thinking Requires Critical Questions

Personality Traits of the Fraudster

The Moral Compass

MIRD (Misrepresentations, Intent, Reliance, Damages)

Confusion about Responsibility



One Minute Fraud Mystery Analysis

Chapter 2 Fraud Detection Approaches

Why Doesn’t Enhanced Legislative, Regulatory, and Professional Oversight Help to Prevent Fraud?

One Minute Fraud Mystery: Big Fish Investment, Inc.

Principles and Rules Alone Cannot Exterminate All Fraud

Getting a Handle on Transactions

The 10 Forensically Accepted Generally Accepted Accounting Principle Assumptions (FAGAAPAs) No No’s


One Minute Fraud Mystery Analysis

Chapter 3 Deciding to Commit Fraud
What Is the “Something” that Coerces Folks to Cross the Line?

One Minute Fraud Mystery: The House of Worship

Do You Really Know What the People in Your Organization Are Thinking?

The Four Generations and Motivation

Pinpointing the Fraudster

The Three Most Prevalent Types of Fraud

An Accounting Creed

Consequences of Fraud


One Minute Fraud Mystery Analysis

Chapter 4 How to Act Like a Fraudster
To Catch a Fraudster, You Need to Think Like One

One Minute Fraud Mystery: Catch Me If You Can Inc.

The Six Ps of Successful Fraudsters

The Characteristics of a Fraudster

Fraudsters & Their Organizations


One Minute Fraud Mystery Analysis

Chapter 5 The Dynamics of Business
Everything Is Related -- From People to Processes to Outside Influences

One Minute Fraud Mystery: Accrual, Inc.

Control Point Links and Accountability

The Layers of Trust

Responsibility Chains

A Failure in Management

More than the Bottom Line

Outside Influences

Organizational Failures

Understanding Cash Flows


One Minute Fraud Mystery Analysis

Chapter 6 Understanding the Accounting Process

One Minute Fraud Mystery: Sneakers Are Us, Inc.

Understanding the Sale of Goods

Deceptive Data

Operating Expenses

Balanced Principles

Balance Sheet Components

Ratio Analysis

Building a Case:  Document Organization, Data Analysis, and Lifestyle Analysis


One Minute Fraud Mystery Analysis

Chapter 7 It All Comes Down to Cash

One Minute Fraud Mystery: Yankee

Handling Cash

Cash Disbursements Controls

Cash and Fraud

Classifications of Cash and Cash Equivalent Fraud Schemes and Scenarios

Fraud Control Points in the Organizational Process


One Minute Fraud Mystery Analysis

Chapter 8 Final Thoughts
Handy Tips and Quick Checklists for Reference

Finding the Next Potential Fraud Kernel in Your Organization Before it POPs (Perspective + Occupation + Position)

Quick References Regarding the Fundamentals of Fraud

Generally Accepted Accounting Principles (GAAPs) versus Forensically Accepted Generally Accepted Accounting Principle Assumptions (FAGAAPAs): A Summary

Why Auditors/Accountants Fail to Detect Fraud

Red Flags Indicating Potential Fraudsters

Using Ratios

A Simple Fraud Risk Plan



About the Author


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