chapter 5a Flashcards
billing scheme
employee submits false documentation to get the company to issue a fraudulent payment
3 categories of billing schemes
Shell company
Non accomplice vendor schemes
Personal purchases scheme
shell company
create fake businesses to generate fraudulent invoices.
preventing and detecting shell companies
verify vendors
compare invoices with purchase order
segegration of duties
red flags of shell companies
vague descriptions
payments just below threshold
unusual expenses
non accmplice vendors
vendor is legit and competely innocent
pay and return schemes
intentionally pay the wrong vendor and ask for a refund and stela money
Overbilling Using Vendor Invoices
employees use invoices in the name of existing vendors to generate fraudulent payments
Preventing and Detecting Non-Accomplice Vendor Fraud
cheques should be photocopied
Require approval for any changes in vendor payment details
cheque tampering scheme
manipulate company cheques to steal money
Preventing and Detecting Personal Purchases
thorough review of each credit card or purchasing card statement
send two copies of the statement
compared with employee expense vouchers
5 principle methods used to commit check tampering:
Forged maker schemes
forged endorsement schemes
Altered payee schemes
Concealed check schemes
Authorized maker schemes
forged maker scheme
signs a cheque without authorization.
Preventing & Detecting Forged Maker Schemes
Store blank cheques securely.
mutliple signers for large payments
watermarks for security
forged endorsement schemes
intercepts cheque and forges signature
altered oayee schemes
steals a legitimate cheque and changes the payee’s name
altered done by
erasable ink, tacking on letters
prevent altered by
carbon copy cheques
concealed cheque scheme
submits a fraudulent cheque among legitimate ones for signature
