FIU ACG 6686 - Chapter 14: Fraud Against Organizations (25 pages)

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Chapter 14: Fraud Against Organizations



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Chapter 14: Fraud Against Organizations

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Pages:
25
School:
Florida International University
Course:
Acg 6686 - Fraud Examination

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Fraud Examination 3E Chapter 14 Fraud Against Organizations COPYRIGHT 2009 South Western a part of Cengage Learning Learning Objectives Understand the extent to which employees and others commit occupational fraud Describe the nature and various types of asset misappropriations Discuss the nature and various types of corruption 2 Occupational Fraud Asset Misappropriation Fraudulent Financial Statements Corruption 3 Occupational Fraud Statistics based on ACFE s 2006 study of 1 134 cases Heavy costs to an organization Median loss is 159 000 Nearly one quarter of the cases caused 1 million in losses Nine cases cause 1 billion or more in losses 4 Occupational Fraud Statistics based on ACFE s 2006 study of 1 134 cases Very difficult to detect Median length of the schemes was 18 months from the time the fraud began until it was detected More likely to be detect by a tip than by other means 5 Occupational Fraud Statistics based on ACFE s 2006 study of 1 134 cases Certain antifraud controls can have a measurable impact on the organization s exposure to fraud Organizations with anonymous fraud hotlines Median loss was 100 000 Organizations without anonymous fraud hotline Median loss was 200 000 6 Occupational Fraud Statistics KPMG 2005 2006 Integrity Survey Nearly 3 out of 4 employees reported to have observed misconduct in the prior 12month period Significant reduction in fraud against an organization occurs when proactive antifraud measures hotlines ethics training etc were implemented 7 Asset Misappropriations Definition Any scheme that involves the theft or misuse of an organization s assets 8 Asset Misappropriations Opportunities to steal assets 1 Steal receipts of cash and other assets that come into an organization 2 Steal cash inventory and other assets that are on hand 3 Commit disbursement fraud by having the organization pay for something it shouldn t or pay too much for something 9 Asset Misappropriations Types of Asset Misappropriations 10 Asset



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