M3 Chapter 12 Fraud Flashcards
Association of Certified Fraud Examiners
One of the largest anti-fraud organizations in the world.
Fraud
a generic term that includes all the ways by which one individual takes advantage of another individual through false representation.
Employee embezzlement
The process where employees intentionally deceive their employers and take company assets.
Vendor fraud
The process by which vendors, or suppliers, take advantage of the firm.
kickback
A process where a portion of the stolen funds are returned to an individual who allows the fraudulent scheme to take place.
customer fraud
In this situation, customers either do not pay for goods purchased or get something for nothing.
Financial Statement Fraud
Also known as management fraud, it involves situations where company management intentionally manipulates the financial statements to make the company appear more profitable than it actually is.
management fraud
Also known Financial Statement Fraud, it involves situations where company management intentionally manipulates the financial statements to make the company appear more profitable than it actually is.
fraud perpetrators
Those customers, employees, and vendors or others who engage in fraud.
fraud triangle
Also referred to as a perceived pressure, a perceived opportunity, and some way to rationalize the fraud.
pressures
Most pressures involve a financial need, although other pressures can also motivate fraud.
internal audit department
A formal organizational department with the responsibility to audit various divisions of the organization.
Control activities
Routinely checking for errors in any area of the organization.
Segregation of duties
Dividing a task into two parts so that one person does not have complete control of the task.
system of authorization
A system to ensure that only authorized personnel have access to sensitive company information.
