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1 Fraud  Prevention  and 1 Fraud  Prevention  and

1 Fraud Prevention and - PowerPoint Presentation

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1 Fraud Prevention and - PPT Presentation

Deterrence Pam Peters CFE Office of Internal Audit Thanks for Attending The next BCUG meeting will be held on November 12 2013 Happy What is Fraud A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment ID: 707335

meeting fraud attending 2013 fraud meeting 2013 attending bcug happy held november occupational asset schemes internal theft audit statement improper financial misappropriation

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Presentation Transcript

Slide1

1

Fraud

Prevention

and

Deterrence

Pam

Peters, CFE

Office of Internal AuditSlide2

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

What is Fraud?

A knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment.

Fraud includes any intentional or deliberate act to deprive another of property or money by deception or unfair means.

2Slide3

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Types of Fraud

Internal Fraud

External Fraud

Fraud Against Individuals

3Slide4

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Internal Fraud

Also referred to as occupational

fraud

“The

use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the organization’s resources or assets

.”

4Slide5

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Occupational Fraud

Three Major types of Occupational Fraud:

Corruption

Asset Misappropriation

Financial Statement Fraud

5Slide6

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Occupational Fraud

Corruption:

Conflict of Interest

Purchasing Schemes

Sales Schemes

Bribery

Invoice Kickbacks

Bid Rigging

Illegal Gratuities

Economic Extortion

6Slide7

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Occupational Fraud

Asset Misappropriation:

Cash

Theft

of cash

Theft of cash receipts

Fraudulent

Disbursements

Billings Schemes

Payroll Schemes

Expense Reimbursement Schemes

Check Tampering

Register Disbursements

7Slide8

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November 12, 2013

Happy

Occupational Fraud

Asset Misappropriation Cont’d:

Inventory and All Other Assets

Misuse

Larceny

8Slide9

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November 12, 2013

Happy

Occupational Fraud

Financial Statement Fraud:

Asset/Revenue

-

Overstatements

Timing

Differences

Fictitious Revenues

Concealed Liabilities and Expenses

Improper Asset Valuations

Improper Disclosures

9Slide10

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Occupational Fraud

Financial Statement Fraud Cont’d:

Asset/Revenue

-

Understatements

Timing

Differences

Understated Revenues

Overstated Liabilities and Expenses

Improper Asset Valuations

10Slide11

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Dishonest Vendors

Dishonest customers

Security breaches

Hacking

Theft of proprietary information

External Fraud

11Slide12

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Fraud Against Individuals

Identify Theft

Ponzi

Schemes

Phishing Schemes

12Slide13

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Why Does Fraud Occur?

The Fraud Triangle:

Developed by Dr. Donald

Cressey

– his research focused on embezzlers, people he called “trust violators”

A

model for explaining the factors that cause someone to commit occupational fraud

13Slide14

14

Fraud TriangleSlide15

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

What Can We Do?

Detect

, Deter, and Prevent fraud before it

occurs

Look for early warning signs:

Accounting records that do not balance or cannot be reconciled

Too much control or ownership of records or processes by one individual

Missing or altered documentation

Employee living beyond their means, lifestyle is inconsistent with known income

15Slide16

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November 12, 2013

Happy

What Can We Do?

Look

for early warning

signs cont’d:

Long-term

or “model” employees, who never take vacation or sick leave

Unexplained changes in an employee’s work behavior

Employees receiving calls at work from creditors or collection agencies

Employees who appear to have unusually close relationships with customers or

vendors

These are just a few examples which may indicate potential fraudulent activity.

16Slide17

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

What Can We Do?

Steps

to mitigate risks:

Be

aware of your surroundings and daily activities

Ensure your area has proper internal controls and segregation of duties

Document what you observed

Report your concerns to your immediate supervisor, Dean/Chair, or the Office of Internal Audit

http://

audit.unl.edu

DO NOT INVESTIGATE POSSIBLE FRAUD YOURSELF!

17Slide18

Thanks for Attending!The next BCUG meeting will be held on

November 12, 2013

Happy

Questions?

Thank you!

Pam Peters, CFE

Senior Auditor

Office of Internal Audit

ppeters2@unl.edu

Source: ACFE

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