Vocab Flashcards
What is a Pyramid Scheme
Recruiting investors
Exponential growth of investors
Cash incentives but people on the top take a cut of the money so the people on bottom of pyramid sad
Look: large upfront fee/ask to add more investors
What is Ponzi Scheme
Fake returns (lie about money increasing)
This’ll make more investors bc “good returns!”
Pay off investors using other investor’s money to add legitimacy
Fails: Many withdrawals
Phishing Scam
someone pretends to be a trustworthy person or company to get your personal or financial information.
Pump-and-Dump
Boosting a stock’s value through recommendations and then sells all shares
Insider Trading
company’s owners or
employees trade its stock or other securities with non-public information about the company
can be either legal or illegal
can result in fines/jail
Compliance Department
ensures business adheres to external rules and internal controls
identifies
risks and advises it how to address/avoid
5 areas
identification
prevention
monitoring/detection
resolution
advisory
Audits
process by which an organization’s accounts and records are verified
Auditing firms
Managerial Accounting
preparing and reporting of financial data to internal users in
order to make operational and business decisions
Direct Costs
directly related to the production of a good or service
ie; raw materials and shipping
Indirect Costs
Not directly related to the production of a good or service
ie; payroll, rent, etc
Horizontal analysis
change in variable over time
Vertical anaysis
percentage of variable as part of the total
SWOT analysis
used for competitive planning
Strengths
Weaknesses
Opportunities
Threats
Benford’s Law
Leading digit in a number is more likely to be small
used to detect patterns in naturally occurring data sets to detect fraud
Claims adjuster
inspect property damage to determine how much the company should pay for the loss
Insurance based
