Detecting Fraud in Organizations: Techniques, Tools, and Resources [NOOK Book]

Overview

The cost of fraud to an organization goes well beyond dollars and cents. Fraud ruins reputations and lives and brings down even the most successful organizations. Although having a well-designed fraud detection system can significantly reduce the chance of fraud from occurring within your organization, the key to detecting fraud is an understanding of where people and organizational value meet, paving the way for fraud.

Drawing from the author's thirty years providing fraud ...

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Detecting Fraud in Organizations: Techniques, Tools, and Resources

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Overview

The cost of fraud to an organization goes well beyond dollars and cents. Fraud ruins reputations and lives and brings down even the most successful organizations. Although having a well-designed fraud detection system can significantly reduce the chance of fraud from occurring within your organization, the key to detecting fraud is an understanding of where people and organizational value meet, paving the way for fraud.

Drawing from the author's thirty years providing fraud training and prevention/detection services for professionals, Detecting Fraud in Organizations: Techniques, Tools, and Resources is designed to get you proactively thinking about fraud from a new perspective. Straightforward, simple, and entertaining in presentation, this unique book focuses on the people in today's organizations and on pinpointing how the value within those organizations is exposed to fraud.

Featuring a companion website with additional fraud case studies and business process maps, this practical, hands-on guide explores:

  • Fraud and why it keeps happening
  • How to get a handle on transactions
  • What happens when someone decides to commit fraud
  • The six Ps of successful fraudsters: passion, philosophy, planning, persistence, patience, and prison
  • How to build a case—document organization, data analysis, and lifestyle analysis
  • Fraud control points in the organizational process

Filled with cartoons, pictures, motivational quotes, and one-minute mysteries that creatively help readers to see beyond numbers and instead focus on open, proactive communication with organizational staff, Detecting Fraud in Organizations looks at the people in today's organizations and identifies how and where the value within your organization may potentially be exposed to fraud.

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Product Details

  • ISBN-13: 9781118237359
  • Publisher: Wiley
  • Publication date: 1/14/2013
  • Series: Wiley Corporate F&A
  • Sold by: Barnes & Noble
  • Format: eBook
  • Edition number: 1
  • Pages: 384
  • File size: 4 MB

Meet the Author

JOSEPH R. PETRUCELLI, CPA/CFF, FCPA, CVA, CFFA, PSA, CFE, is a founding partner of PP&D Accounting Services, Inc., and Fraud Forces, Inc., where he provides forensic accounting, tax, and consulting services, including testifying and preparing for trial as a qualified expert. He is also an adjunct professor teaching accounting and taxation-related courses, including advanced forensic accounting. He was part of the development team on the fraud risk management and detection certification curriculum of Consultants' Training Institute (CTI), a division of the National Association of Certified Valuators and Analysts (NACVA).

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Table of Contents

Preface ix

Acknowledgments xi

Introduction 1

The 800-Pound Friendly Gorilla 1

Numbers Don’t Lie, People Do 3

An Overview of Fraud 4

The One-Minute Fraud Mysteries 8

A Few Tips for Detecting Fraud As You Begin 13

Setup 16

Chapter 1: Understanding Fraud: What Is Fraud, and Why Does It Continue to Happen? 19

People Are Greedy—How Greedy Are You? 20

One-Minute Fraud Mystery: Trust Us Inc. 21

Distinguishing among Deterrence, Prevention, and Detection 22

The Increased Risk of Fraud Loss 35

Divergent and Convergent Thinking 36

Critical Thinking Requires Critical Questions 40

The Personality Traits of a Fraudster 45

The Moral Compass 48

The Elements of Fraud: MIRD 48

Education about Fraud 52

Confusion about Responsibility 55

Complexity 56

Summary 60

One-Minute Fraud Mystery Analysis 62

Chapter 2: Fraud Detection Approaches 69

Why Doesn’t Enhanced Legislative, Regulatory, and Professional Oversight Help to Prevent Fraud? 70

One-Minute Fraud Mystery: Big Fish Investment Inc. 72

Principles and Rules Alone Cannot Eliminate All Fraud 74

A Real-World Perspective 76

Getting a Handle on Transactions 79

The 10 Forensically Accepted Generally

Accepted Accounting Principle Assumptions 81

Summary 107

One-Minute Fraud Mystery Analysis 109

Chapter 3: Deciding to Commit Fraud: What Is the “Something” That Coerces People to Cross the Line? 119

One-Minute Fraud Mystery: The House of Worship 122

Do You Really Know What the People in Your Organization Are Thinking? 122

The Four Generations and Motivation 128

Pinpointing the Fraudster 133

The Three Most Prevalent Types of Fraud 133

An Accounting Creed 135

The Consequences of Fraud 137

Summary 149

One-Minute Fraud Mystery Analysis 150

Chapter 4: How to Act Like a Fraudster: To Catch a Fraudster, You Need to Think Like One 155

One-Minute Fraud Mystery: Catch Me If You Can Inc. 157

The Six Ps of Successful Fraudsters 158

The Characteristics of a Fraudster 161

Fraudsters and Their Organizations 170

Summary 177

One-Minute Fraud Mystery Analysis 178

Chapter 5: The Dynamics of Business: Everything Is Related—from People to Processes to

Outside Influences 185

One-Minute Fraud Mystery: Accrual Inc. 189

Control-Point Links and Accountability 190

The Layers of Trust 191

Responsibility Chains 193

A Failure in Management 194

More Than the Bottom Line 196

Outside Influences 199

Organizational Failures 203

Understanding Cash Flow 206

Summary 211

One-Minute Fraud Mystery Analysis 212

Chapter 6: Understanding the Accounting Process 219

One-Minute Fraud Mystery: Sneakers Are Us Inc. 223

Understanding the Sale of Goods 224

Deceptive Data 235

Computerized Fraud Techniques 237

Operating Expenses 240

Balanced Principles 246

Balance-Sheet Components 252

Statement of Cash Flow 252

Ratio Analysis 257

Building a Case: Document Organization, Data Analysis, and Lifestyle Analysis 261

Summary 264

One-Minute Fraud Mystery Analysis 265

Chapter 7: It All Comes Down to Cash 271

One-Minute Fraud Mystery: Yankee Property Management 275

Handling Cash 276

Cash Disbursement Controls 279

Cash and Fraud 282

Classifications of Cash and Cash-Equivalent Fraud Schemes and Scenarios 285

Fraud Control Points in the Organizational Process 302

Summary 303

One-Minute Fraud Mystery Analysis 304

Chapter 8: Final Thoughts: Handy Tips and Quick Checklists for Reference 309

POP: Finding the Next Potential-Fraud Kernel in Your Organization 310

Quick References on the Fundamentals of Fraud 311

GAAP versus FAGAAPA: A Summary 315

Five Categories of Fraud 319

Why Auditors and Accountants Fail to Detect Fraud 326

Red Flags for Potential Fraud 327

Using the Accruals-to-Assets Ratio 327

A Simple Fraud Risk Plan 330

Conclusion 333

Afterword 337

Bibliography 339

About the Author 343

About the Website 345

Index 347

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Sort by: Showing 1 Customer Reviews
  • Posted February 4, 2013

    I know the author in a professional capacity for over 15 years,

    I know the author in a professional capacity for over 15 years, Joe has a gifted financial mind.  If anyone could properly and succinctly advise an organization or financial professional, Joe is the one.  He is armed with the experience, intellect  and integrity driven passion to weed out the fraudsters.

    Samuel P. Lamparello, CMB  

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