Fraud’s Finer Points: Accounts Receivable Fraud, Part Five: Other Accounting Manipulations


Fraud’s Finer Points: Case history applications - Accounts Receivable Fraud, Part Five: Eliminating Customer Accounts and Fictitious Account Adjustments
Here are learning objectives from two types of on-book accounts receivable fraud schemes the author has seen routinely in state and local government.

ActiveData for Excel: Harness the Power of Excel with the Features of IDEA


An interview with Marta Andreasen, suspended chief accounting officer of the European Commission - Telling the Truth & Living in Limbo
Marta Andreasen, the European Commission’s chief accounting officer, awaits her professional fate after declaring the EC’s budget was “mas-sively open to fraud” and endures suspension because of her honesty.

Analyze this and that. FraudBasics: Critical Analytic Techniques
As fraudsters become more proficient, CFEs must be able to use equally sophisticated fraud examination skills. Here's how you can stay on top of your game with criminal analytic techniques.

At last, companies are listening: Fraud risk assessments
From the March/April issue of Fraud Magazine

Audit Those Vendors
A vendor can be an entity’s best colleague or worst nemesis. Keep the relationship pleasant and successful by conducting vendor audits.

Back to School: Anti-fraud training for audit committees
SOX and other regulatory standards are forcing audit committees to learn how to prevent fraud. Here's what they need to learn and how you can help them learn it so they will escape litigation, and most importantly, tackle fraud.

Beating fraud through internal auditing: A fraud primer for the new internal auditor
When new internal auditors are assigned the task of looking for fraud, many find themselves without the necessary skills to do a proper examination. In this session, you'll get an overview of what the new internal auditor needs to know about fraud in his or her first fraud assignments.

Breaking Tradition in the Auditing Profession
Established auditing approaches cannot adequately detect financial statement fraud. The ACFE proposes a Model Organizational Fraud Deterrence Program as an alternate, more effective strategy for both auditors and investors.

Check fraud: Separating Money from Worthless Paper
Despite the heavy use of credit cards and online payments, and the redoubled efforts of the FBI and police anti-fraud units, check fraud continues to increase. CFEs can benefit from reviewing the rudiments of check fraud detection and prevention, and the new twists.

CASE IN POINT: Check This Out
The executive secretary of a local charity was beloved for her hard work and generous nature. Unfortunately, she was working hard to tamper with the organization's checks so she could be generous to herself.

Effective solutions for combating employee theft: Combating internal fraud in the banking industry: Page 1
Fraud continues to prosper in the banking industry with a variety of fraud schemes. This session will be a practical discussion of fraud schemes that are perpetrated by banking insiders. You'll also learn some of the solutions that your organization can implement to prevent the fraud from occurring.

Effective solutions for combating employee theft: Combating internal fraud in the banking industry: Page 2
Fraud continues to prosper in the banking industry with a variety of fraud schemes. This session will be a practical discussion of fraud schemes that are perpetrated by banking insiders. You'll also learn some of the solutions that your organization can implement to prevent the fraud from occurring.

Comparing Best Software for Fraud Examinations
Fraud examiners now have a wide choice of data interrogation tools they can use themselves without bothering the IT department. Here's a comparison of the features of the five most popular products.

Fraud prevention: the latest techniques. Compliance and the corporation
With all of the corporate scandals that have been going on in recent years, corporations have been developing compliance programs to keep them out of trouble when employees deviate from acceptable behavior. How does your corporation measure up? It it's not top notch, you may find yourself in hot water if corporate mischief occurs.

FRAUDBASICS: Con Schemes Abound, Part One
Investment swindles and con schemes have been around for centuries, but the Internet allows perpetrators to reach a wider audience at little cost.

Conducting international investigations: Issues & Solutions
As corporate entities become more global, so will investigations. However, how you conduct investigations in your country may differ widely from investigations in another country. Learn the issues that you need to know in order to protect you from risk as well as solutions to these problems that you are sure to encounter.

Using the law to fight fraud: Conducting kickbank investigations
Kickback investigations can be difficult. Evidence is hard to find and witnesses are even harder to turn. This session will focus on the investigation and resolution of kickback investigations including looking for the warning signs that you'll most likely come across and evaluating the outside parties making the payments.

Construction Fraud: Beware the ‘Outside Facilitator’
Crafty manipulators will use weak employees at construction job sites to defraud companies for many months – long before the home office smells any problems.

Corruption and Fraud Stunt Third-world Growth, Part Two
Corrupt officials burden developing countries with unfinished projects and crushing debt - conditions that lead to economic decline and international terrorism.

Designing a Robust Fraud Prevention Program, Part One
There may not be a more opportune time for a fraud examiner to press for a full-fledged fraud prevention program.

Designing a Robust Fraud Prevention Program, Part Two
Entities worldwide must transform security departments into rigorous fraud prevention programs staffed with qualified fraud examiners.

Detecting Fraud in the Data, Part One
Automatic intervention detection – an advanced computer-based tool – can be used to distinguish companies with fraudulent data from those with no indication of fraudulent reports.

Detecting Fraud in the Data Using AID, Part Two
In Part One, we examined the basics of automatic intervention detection – an advanced computer-based tool. Here we describe the methodology of a research study conducted to explore the effectiveness of AID.

Fraud prevention: the latest techniques. Developing and auditing loss prevention policies and procedures, Part 1
Sweeping changes continue to reshape the workplace. The role of the loss prevention director has found his role dramatically changing from the primary role of protecting the organization's assets. This session provides an in-depth look at the essential elements of developing an effective loss prevention program. Also discussed will be guidance in auditing policies and procedures.

Fraud prevention: the latest techniques. Developing and auditing loss prevention policies and procedures, Part 2
Sweeping changes continue to reshape the workplace. The role of the loss prevention director has found his role dramatically changing from the primary role of protecting the organization's assets. This session provides an in-depth look at the essential elements of developing an effective loss prevention program. Also discussed will be guidance in auditing policies and procedures.

Draw Me a Diagram: Finding Fraud with the ‘ Common-size Diagram’
Use this simple tool to discover anomalies on both sides of the balance sheet.

Earnings Management Revisited: Further Suggestions in the Wake of Corporate Meltdowns
Here we provide an update on earnings management, including the implications of the U.S. Sarbanes-Oxley Act of 2002, and offer suggestions for improving performance reporting in all countries.

FBI Combats Financial Fraud with CFEs
Brian Lamkin, chief of the FBI's Financial Crimes Section, directs his team of agents and analysts to tackle fraud while working toward additional recognition for CFEs.

Fear Not the Software: Detecting fraud risk with strong methodology
During a recent meeting, I was looking at a whiteboard on which an accounting malpractice attorney had mapped out a defense case for an auditor who had failed to detect a large billing scheme fraud.

Fear Not the Software: Proactively Detecting Occupational Fraud Using Computer Audit Reports
Data analysis provides many benefits in the prevention, detection, and prosecution of fraud.

Fighting fraud in Canada: An interview with Irwin Cotler, minister of justice and attorney general of Canada
Irwin Cotler, minister of justice and attorney general of Canada, has a passion for protecting the rights of others - including those citizens hurt by corporate fraud and securities violations.

Financial fraud red flags: Searching for the funnel clouds
Fraud examiners, when looking backwards to the early stages of an investigation, report common patterns. Like tornado watches, these signals don't indicate the funnel clouds were sighted but that they might develop because of optimal conditions.

FRAUDBASICS: Financial Statement Fraud, Part Two
Fictitious revenues and timing differences are two of five classifications of common financial statement schemes.

U.S. Federal Regulations - Former SEC Chief Accountant: Systemic Problems Need Fixing
Lynn Turner says there’s still arrogance in the public business world, more should be spent on enforcement, and higher education accounting should be taught in a “framework of making ethical decisions."

Formulas for detection: Analysis ratios for detecting financial statement fraud
Messod Daniel Beneish, Ph.D., Indiana University accounting professor, has devised analysis ratios for identifying possible financial statement frauds.

Protecting the public interest: Fraud in the government, Lessons learned while building an investigative procurement fraud detection program
It’s a fraud that affects both the public and private sector — procurement fraud. It’s also a fraud that is difficult to detect. In this session, you’ll learn how to build a proactive investigative procurement fraud detection program and how to avoid making some mistakes that could be costly and program counter-productive. Also discussed will be procurement fraud risk analysis, financial system data-mining, and the need for procurement fraud referrals.

Protecting the public interest: Fraud in the government: Stealing from the court, a case study
The analysis of any employee embezzlement fraud case study begins with the basics – the who, what, when, where, and how.

Fraud Basics / Part One: Intro to asset misappropriations for non-accountants: The stolen guitar and other assets
This first part of a short primer on asset misappropriations begins with some definitions and the basics of an entity's accounting.

Fraud Forum Results
The Association is proud to announce the results of the first-ever Occupational Fraud Forum.

Fraud's Finer Points: Case History Applications
I'm closing our discussion about accounts receivable fraud with this column by unveiling some of the more creative methods fraud perpetrators use to steal money from the organization. We'll also examine some learning objectives from the final type of on-book accounts receivable fraud scheme I see routinely in state and local government.

Fraud's Finer Points: Case History Applications. Cash Larceny, Part One. No fixed responsibility losses
With this column, we begin a new series about cash larceny - on-book frauds in which employees steal the organization's revenue after accountability for the funds has been recorded in the accounting records.

From The PRESIDENT
Sentinels should be highly valued and respected but they’re often branded as disgruntled employees by managers eager to discredit their allegations. Marta Andreasen, a sentinel at the European Commission, has paid a high price for reporting weak or missing internal controls.

From The President: The Value of the CFE Credential is High and Growing
The value of the CFE credential is high and growing

Ghost Goods: How to Spot Phantom Inventory
Inventory overstatements make up the majority of asset valuation frauds and are the focus of this article.

Global Composite Model: A Plan to Detect and Prevent Fraud Worldwide
Entities throughout the world are devising models to detect and prevent fraud in the workplace. This CFE from the United Kingdom constructs a composite from three countries that can be adapted to any public or private entity.

Global Risks Reduced: International Business Doesn’t Have to Be Risky
Being aware of and prepared for issues like personal safety, office supply needs, technology, and language barriers will help you adapt more smoothly to a foreign environment. Even more important is understanding the business culture of the country you’

Protecting the public interest: Fraud in government. Grant/Contract fraud in the public sector
Not all fraud involves the theft of assets, but rather some involve the misuse of assets. Every year, Federal, State and Local Governments award thousands of dollars in grant/contracts to vendors. However, the grant money is not always prudently managed. This session focuses on the ways and manner in which government grants are misapplied or misused, oftentimes to the benefit of the program administrator.

Hanging Global Money Launderers Out to Dry, Part One
Global money laundering has ballooned - some estimates range as high as $500 billion a year worldwide. But overt and covert methods can trace the funds, find the evidence, and make the fraudsters pay.

Hanging Global Money Launderers Out to Dry, Part Two
In Part One, we described the typical sources of illicit funds formoney laundering, money laundering methods, and how to detect illicit financial transactions. Here we describe how to use the information to make the case.

Preventing and detecting financial statement fraud: Identifying fraudulent financial transactions
One of the most difficult tasks that an auditor has is to identify fraudulent transactions. In this session you'll not only learn what the schemes are, but develop a framework for detecting fraud. Of particular emphasis is a type of financial statement fraud that is not often discussed - inadequate disclosures. You'll get tips for finding the frauds but also how to prevent the fraud.

Identity Theft: Hunting Down and Nabbing the Thieves - Part 1
Catching identity thieves requires solid cooperation and hard-hitting procedures among fraud examiners, auditors, law enforcement, postal inspectors, the courts, banks, credit card companies, business owners, government, and many others.

Effective solutions for combating employee theft. Ignoring indicators equals fraud: a case study
Financial statement audit failures contribute to the untimely discovery and prevention of fraud. How and why does this happen? The appropriate use of Generally Accepted Auditing Standards can identify fraud risk resulting in deterrence and discovery. In this session, GAAS will be discussed and common deficiencies in work will be highlighted together with the disastrous fraud schemes that were discovered too late.

Inside Job: A Guide to U.S. Insider Trading
U.S. insider trading is relatively easy to commit but extremely difficult to prove. Here is a primer for fraud examiners explaining the problem, how to tell if a trade is illegal, and what can be done to detect and prevent this popular crime.

Insidious Mold Fraud
Mold has existed before humans and will probably outlast us but recent huge mold insurance claims have inspired fraudsters to make some quick money.

Internal Auditing: What internal auditors need to know about fraud
As internal auditors continue to play a significant role in fraud, they find themselves not always prepared to take on this sometimes complicated task. In this session, you'll learn what the relevant issues are, casework and new tools in forensic accounting that internal auditors will need to address fraud.

Investment-bond Fraud: Smiling Faces Asking for Your Retirement Money
David Namer had the perfect place for your retirement money: mid-yield corporate bonds – Private Placement Memorandums – backed by insurance from a top-rated company. It was perfect until the pyramid collapsed. Learn how this convicted former banker took thousands of small investors for almost $35 million.

It is Not What We Say, but How We Say It
New insights have shown that deceivers can now be identified by how they say things and not just by what they say.

CASE IN POINT: Italy’s Parmalat Milking - Investors Through Financial Statement Fraud
Parmalat – a milk-and-cookies conglomerate – seemed at first glance to be above suspicion. But the firm began to implode when the Italian regulatory commission began its investigation, a Parmalat bank account supposedly holding 3.9 billion Euros was found to be fictitious, and Parmalat fired its two chief auditing companies. This one will last for years.

Lapping It Up
Lapping is the fraudster's version of robbing-Peter-to-pay-Paul skimming.

Fraud preventions: The latest techniques. Developing a strategy to fight fraud
Does your organization have a strategy to fight fraud? It's not enough just to detect and investigate fraud, but a well-rounded anti-fraud program will also have taken measures that will prevent fraud. Once this is implemented, everything else will fall into place. Learn how you can develop strategies that will work for you.

Let Them Know Someone’s Watching
Those who perceive they will be caught engaging in fraud are less likely to commit it.

Living Longer, Dying Slower: Long-term Care Insurance Fraud
All fraud examiners must know about this impending assault on both the global health care sector and the public’s financial reserves.

Money Laundering: Ring Around the White Collar
In money laundering the fraudster disguises the existence, nature, source, ownership, location and disposition of property derived from criminal activity.

New Approaches for Fraud Deterrence
This article should provoke thought and debate among CPAs on how we might consider different approaches in the way audits are conducted in order to give the public what it really wants: business enterprises with integrity.

No Confession, No Evidence, No Case?
Fraud examiners often have to use time-honored techniques to parse the words of alleged fraudsters during an interrogation. But sometimes the absence of a suspect's deception can help make the case.

Occupational Fraud: The Audit as Deterrent
From actual case studies taken from the Report to the Nation, auditors and their clients will learn the methods used by employees and insiders to commit occupational fraud and what can be done to better detect and deter these offenses.

The Padding That Hurts
Auditors cannot ignore expense account cheating by management.

Preventing, Deterring and Detecting Fraud: What Works and What Doesn't


Fraud prevention: The latest techniques. Proactive fraud risk reviews: Page 1
In order to combat the modern day fraudster, you need to stay one step ahead of the game. Management must realize that they are not immune to fraud and abuse and must be willing to root out the causes and address their concerns head on. To be successful in the fight against fraud you need a game plan that addresses all opportunities for fraud and abuse and details a plan of action. Learn what the best practices are and what you can use to perform a fraud risk review within your organization.

Fraud prevention: The latest techniques. Proactive fraud risk reviews: Page 2
In order to combat the modern day fraudster, you need to stay one step ahead of the game. Management must realize that they are not immune to fraud and abuse and must be willing to root out the causes and address their concerns head on. To be successful in the fight against fraud you need a game plan that addresses all opportunities for fraud and abuse and details a plan of action. Learn what the best practices are and what you can use to perform a fraud risk review within your organization.

Fear Not the Software: The Pros and Cons of Microsoft Access as a Fraud-busting Tool


Protect Small Business
Small businesses - Especially those that do not have regular audits - have every reason to worry about fraud.

Protecting the Public Interests: Mismanagement of Government Grant and Contract Funds
Fraud, waste, abuse, and mismanagement of government contract and contract funds will never be eliminated. But frequent, modest proactive audits and reviews that focus on fraud indicators will help identify and prevent misuse before the funds are expended.

Beating fraud through internal auditing: Red flags and sources of information for internal audit
Studies show that most fraud against businesses originates from within. In this presentation, you'll learn some of the red flags that may indicate potential financial and ethical problems within an organization and sources of information that the internal auditor can use to proactively detect these vulnerabilities.

Revenue Inflation and Deflation: Detecting Fictitious Revenues in Financial Statements
Intentional misstatement of revenues became the fashionable fraud in 2002. But the crime existed long before WorldCom and Enron. In 1999 alone, more than half of the Security and Exchange Commission's (SEC) fraud cases involved falsifying revenue.

The Rewards of Dishonesty
Each of us has his or her moral code. It becomes the foundation for the ethical decisions we make on a daily basis.

Risky Business: Conducting the internal fraud risk assessment
Devising and conducting an internal fraud risk assessment may be a daunting task, but every fraud examiner should have the essentials to get the job done. Here are some steps you can take to prevent and detect fraud.

Sarbanes-Oxley Implementation: Giving SOX and Fraud Examiners Genuine Clout
Douglas R. Carmichael, Ph.D., CFE, CPA, chief auditor of the Public Company Accounting Oversight Board, has the tough task of guiding the standards-setting procedures of the Sarbanes-Oxley Act while balancing the interests of diverse groups.

SAS 99: Another Implement for the Fraud Examiner’s Toolbox
SAS 99 not only requires auditors to be reasonably sure that financial statements are free of material misstatements, whether caused by error or fraud, but it gives them focused and clarified guidance on meeting their responsibilities to uncover fraud.

Setting the Stage to Fight Fraud: Using ‘Scenario Planning’
Fraud examiners can bypass the entire investigation process and actually solve the crime before it happens.

Sherlock Holmes, CPA, Part 1
The first step in uncovering fraud in the auditor’s bailiwick: analyzing financial information.

Fraud's Finer Points: Case History Applications. Skimming revenue, part one: The highest-risk employee
After a lengthy discussion of accounts receivable fraud, it's time to focus our attention on other prime areas where fraudsters abuse the systems of internal control to raid organizations' treasuries for their own personal benefit. With this column, we begin a journey through the many facets of cash receipting and types of fraud that occur in every organization. Our first step involves skimming: removing funds prior to recording accountable transactions in the accounting system.

So That’s Why It’s Called a PYRAMID SCHEME
Fraud comes in many shapes and sizes—and it’s growing faster than ever.

Starting Out: For and About Fraud-Fighting Students in Higher-Ed
Who learns more, the teacher or the student? The answer to this question is irrelevant in today's world since each of us needs to be CONTINUALLY learning as a student and sharing our knowledge as a teacher. In this column we get to access the knowledge of the best and brightest who are entering the fraud profession.

Starting out: Students: This Column is for You!


Timing is of the Essence
When companies get desperate to show earnings or reduce losses, sometimes they resort to fraudulent timing differences to show phony profits.

Traveling the World in Style on the Company's Nickel
Don't ignore travel and entertainment expense reporting records. Small infractions can add up to thousands in losses and lead to greater frauds.

Truth, Transparency, and Accountability with no Political Agenda
An interview with U.S. Comptroller General David M. Walker, head of the General Accounting Office

Developing your fraud examination skills: Using Microsoft Excel and Access to detect fraud
There are many software applications that are available for you to detect fraud. Unfortunately, some of these programs are outside of many fraud examiners' budgets. However, most fraud examiners have Microsoft's Excel and Access right on their desktop, not realizing the potential as a powerful anti-fraud tool. Learn, first hand, some of the practical fraud-busting reports that you can generate using these products.

The Whole, Not the Parts
Outcome-oriented fraud auditing - looking at a situation as a whole rather than its individual parts - will help you think like a fraudster and find deeply embedded crimes.

“Why Ask?” You Ask
A vital part of discovering fraud concerns the auditor's ability to ask questions and the implications of not asking them. Since most auditors have had no formal interview training, this article focuses on the basics: how to approach the fraud issue with

Why Employees Commit Fraud
It is important for CPAs to understand what motivates people to commit fraud so they can better assess risk and assist employers or clients in implementing appropriate preventive and detective measures.

Preventing and detecting financial statement fraud: Worldcom bankruptcy: A fraud examiner's perspective
The WorldCom scandal has taught the financial world many things. It's also a classic study of what not to do in the corporate world when it comes to financial records and how to avoid disaster. In this session you'll learn about WorldCom's bankruptcy and how fraud fits in the picture. It wasn't pretty, but there are many lessons that can be learned to help prevent this from happening again.

Wrap it Up Packaging Your Case for Prosecution
When you decide to prosecute a fraud suspect, don't expect a prosecutor to accept your case unless you bring a professional package to the referral meeting.

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