Table of Contents
Preface: Maybe It's Time We Get Back to the Basics xi
Acknowledgments xvii
Part I The Anti-Fraud Environment: The Blueprints, the Foundation, the Ground Floor
Chapter 1 The Architect's Blueprint: Establishing the Framework 3
The Elements of Anti-Fraud Program Design 3
Anti-Fraud Environment 4
Fraud Risk Assessment 4
Control Activities 5
Information: Program Documentation 6
Communication: The Company Fraud Training Program 6
Monitoring and Routine Maintenance 7
Chapter 2 Foundational Policies: The Fraud Policy 9
Foundational Policies 10
The Fraud Policy; The Essential Elements of an Effective Fraud Policy 10
Case Presentation 17
Chapter 3 Foundational Policies: The Fraud Reporting Policy 19
The Essential Elements of an Effective Fraud Reporting Policy 20
Chapter 4 Foundational Policies: The Expense Reimbursement Policy 29
Case: "No Questions Asked" 29
Case: "It Will Never Be Missed" 30
Case: Larry the Chief Financial Officer 31
The Elements of an Effective Expense Reimbursement Policy 32
Appendix 4A Expense Report Form 39
Appendix 4B Supplemental Business Meal and Entertainment Charges Form 40
Chapter 5 The Ground Floor: The Fraud Risk Assessment Process 41
Ground Rules for Fraud Risk Assessment 42
An Example of Risk Assessment 43
Procedural Steps for Performing a Fraud Risk Assessment 44
Cash in Bank 48
Case: The Trail Is Gone 50
Case: Friends in Low Places 51
Asset Misappropriation 52
Corruption 53
Financial Statement Fraud 53
Part II Anti-Fraud Control Activities: Raising the Walls
Chapter 6 Control Activities: The Absolutes 57
Critical Principles of Control Activity Design 57
Foundational Control Activities 59
Case: The Mail Drop in Las Vegas 64
Appendix 6A Conflict of Interest Form 67
Appendix 6B New Vendor Establishment Form 68
Chapter 7 Control Activities: The Segregation of Duties Dilemma 69
But I Only Have Two Employees 69
Prevention versus Detection Controls 70
The Necessary Review Processes 72
Chapter 8 Control Activities: General Processes 75
Two Operational Questions 75
Common Control Activities 81
Case: The Cell Phone Reimbursement 91
Chapter 9 Control Activities: Specific Control Areas 95
Financial Statement Line item Control Activities 95
Part III Completing the Anti-Fraud Program: The Ceiling, the Roof, and Routine Maintenance
Chapter 10 The Ceiling: Documenting the Anti-Fraud Program 103
Information 103
Documentation-Keeping It Simple 104
The Elements of High-Quality Documentation 104
Chapter 11 The Ceiling: The Company Fraud Training Program 111
The Elements of Effective Communication 112
The Company Fraud Training Program 114
Chapter 12 The Roof: Monitoring and Routine Maintenance 119
Monitoring and Routine Maintenance Defined 120
The Monitoring and Routine Maintenance Structure 120
Chapter 13 The Sample Anti-Fraud Program 129
Appendix 13A Fraud Risk Assessment Framework Form 137
Appendix 13B Control Activities Form 138
Appendix 13C Documentation of Control Activities 139
Appendix 13D Compliance Audit Programs and Related Compliance Audit Working Papers 154
Appendix A The Fraud Policy 171
Appendix B The Fraud Reporting Policy 175
Appendix C The Expense Reimbursement Policy 179
Appendix D Forms 185
About the Author 193
Index 195
