Meeting 2 Fraud
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Transcript of Meeting 2 Fraud
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Fraud and Forensic Accounting overview
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Types of Fraud
ACFE: fraudulent financial reporting
(pelaporan keuangan yang curang),misappropriation of assets(penggelapanatau penyalahgunaan asset) dan korupsi .
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Albrecht, Albrecht, dan Albrecht 2006, 10-
11)mengklasifikasikan fraud berdasarkanpelakunya: employee embezzlement,management fraud, investment scam, vendor
fraud, customer fraud, danmiscellanousfraud.
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Type of Fraud Victim Perpetrator Explanation
1. Employee
embezzlement oroccupational fraud
Employers Employees Employees directly or
indirectly steal fromemployers
2. Management
fraud
Shareholders, lenders,
& others who rely on
Financial Statements
Top
management
Top management provides
misrepresentations, usually
financial information
3. Investment
scams
Investors Individuals Individuals trick investors into
putting money into fraudulent
investments
4. Vendor fraud Organizations that buy
goods & services
Organizations
or individuals
that buy
goods and
services
Organizations overcharge for
goods & services or non-
shipment of goods even
though payment is made
5. Customer fraud Organizations that sell
goods and services
Customers Customers deceive sellers
into giving customers
something they should not
have
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Employeeembezzlement
Managementfraud
Investmentscams
Vendor fraudCustomerfraud
ACFE
Association of Certified FraudExaminers
Employeestaking employers assets
Overcharge for goods, or shipinferior goods
Selling worthless investments tounsuspecting investors
Manipulation of financial statementsby management
Getting something for nothing, notpaying for goods & services
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Meeting 2 7
FraudPerpetrators
Other Property OffendersUni Students
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Yes
Most pressures involve
financial need
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PerceivedOpportunity
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Rationalisation
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Perceived Opportunity
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Can fraud be prevented by removing one of thethree elements of fraud from the fraud triangle.
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Perceived Opportunity
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Inversely, the higher the personal integrity
the less likely to commit fraud. It will take much more of the three fraud
elements to move them to commit fraud.
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Incentive
Expensive lifestyle to maintain (39%) Dissatisfaction with the company (14%) Career disappointment (14%)
Opportunity
Insufficient controls (41%) External collaboration (36%) Management over-ride (25%) Internal collaboration (22%)
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Self rationalisation
Lacking awareness of wrong-doing (52%)
Low temptation threshold (50%)
Self-denial of consequences to company (26%)
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Motivations
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Year of Employment
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1, 2, 3, 4, 5, 6, ., 35
30% 70%
What is the age of theperson most likely tocommit fraud?
35 - 44
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Per PwC Global Economic Crime Survey 2006(Australia) Male (87%)
Aged 41 50 (53%)
Educated to high school or less (60%)
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Male aged 38 years acting alone Non-management employee Employed for a period of 5 years and held
current position for three years at the time
of detection Motivated by greed, misappropriating funds
to an average value of $219,707 Detected by agencys internal controls 12
months after the commencement of thefraud
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Per BDOs Not-for-profit Survey 2006 Female (54%)
Aged in 40s
Paid non-accounting employee
Only 15% committed by volunteers 89% of reported frauds were under $50,000
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73% of employees who committed fraud actedalone.
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Management & above
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Financial services Non-financial servicesSector
Lending fraud 43% False invoicing 31%
Theft of cash 35% Theft of inventory 21%
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Non-management
Financial Services Non-financial Services
False invoicing 22% Theft of cash 29%
Theft of tangible
assets 20%
Theft of inventory 20%
Theft of cash 18% Unauthorisedmanipulation of
computer data 17%
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1. The Theft Assets Are Taken
2.
Concealment Hide It from Others
3. Conversion Spend or Convert to Cash and
then Spend
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Ability to get around internal controls
Inability to judge performance
Failure to discipline prior frauds Lack of access to information
Ignorance, apathy, incapacity
Lack of an audit trail
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KPMG Fraud Survey 2006 PwC Global Economic Survey 2006
Not-for-profit Survey BDO
Albrecht, et.al Fraud Examination Thomson,2 Ed, 2006
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Your presentation should take approximately 10-15 minutes.And then, 10-15 minutes for answering questions. For Articlepresentations, give a summary of the article(s), theirobjectives and major findings/recommendations. In addition,evaluate strengths/weaknesses and identify any further
issues that could have been considered. For Casepresentations, provide background information on the case,definitions of terms, major factors relevant to the case andanswers to the case questions. Provide a copy of yourPowerPoint slides to class members (30 copies).
Topic for group 1: Plutonium Case
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