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Fraud Prevention

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by

Lee Blattner

on 8 December 2015

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Transcript of Fraud Prevention

Financial Statement fraud is sometimes called Creative Accounting, which kind of makes it sound like an artistic endeavor, but it’s really just a variety of schemes to falsify assets and revenue. Think Enron, MCI WorldCom. The crime is typically perpetrated by the people who stand to benefit the most – the executives. When it happens, it has the potential to have a devastating effect. Fortunately this is the least common type of fraud. Corruption usually takes the form of
Business Daily
While many people are still struggling to find work, white-collar crimes are on the rise. The most pervasive among these, asset misappropriation or the misuse of
company cash or physical assets. Case in point, a large government contractor with thousands of employees secured their check stock in a locked caged room in the basement of a secure facility that guards checked regularly. Once a week when checks were printed the pre-printed check number was verified against the next sequential number in the system. Despite all of this security a thief stole tens of thousands of dollars over the span of several months. By now you may be thinking that their (See
Crime
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PHOENIX - Freeport McMoRan Copper & Gold is one of the largest mining companies in the world. According to police, an employee is accused of entering a fictitious vendor into their accounting system and submitting fake invoices in mid-2006. The total amount of the fraud is reported to be $500,000! (See
Fraud
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ENTERTAINMENT
Employee fraud is an equal opportunity parasite that preys on businesses, nonprofits, and schools. The collective effect is that fraud robs organizations of 5% of their annual revenue. Many organization rely on spot checks and then do a deep dive to catch the would-be preparatory. Spot checks like this commonly examine no more than 5% of transactions at random. Innovations such as the anti-fraud software product SmartTouch AFP
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Zoom
Zoom
WEDNESDAY, APRIL 1, 2015
BizDaily.com
Box Office: "American Heist" Reigns with $70 million
LOS ANGELES - "American Heist" continues to win big at the box office. The Ocean's Eleven style caper is the brain child of software architect and amateur playwright Jeff Crain, who stars in the movie as himself. Crain’s brilliantly woven crime drama twists and with the (See
Heist
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BUSINESS
Fraud: Fictitious Vendor Scheme Costs Local Business
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turn the tables on this equation. With SmartTouch AFP, 100% of transactions are scanned for fraudulent activity and Fraud has a lifecycle... the longer it lives the more it costs you. When I mentioned that the average fraud is $145,000. Most detected fraud isn’t a single incident. When they find that you’re vulnerable, they go back and do it again. The fact is, most fraud goes undetected for 18 months.
TYPES OF FRAUD
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White-collar crime soars
Advanced Fraud Prevention
Proactive Control...
...before they do their damage
...before they cost you money
Spending Habits
Vendor History
Approver Activity
“Having computer systems in place that flag unusual transactions can reduce losses by 60%...”
John Warren
Vice President & General Counsel
Association of Certified Fraud Examiners

purchasing or sales schemes that have a conflict of interest or involve invoicing kickbacks – in other words bribery. The vast majority of corruption cases involve more than one individual and involve persons from either upper management or purchasing. Some of the big warning signs are a person that has an unusually close relationship with vendors and seems to have control issues with their work. This also includes things like bid rigging – an RFP specifically designed so that only one vendor (See
Types
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Verify
Fraud
Pay
Job Rotation
Segregation of Duties
Secure Assets and Information
Audits
Tip Line
Surveillance and Monitoring
Circumstantially Predictive
SmartTouch AFP
Full transcript