Forensic Accounting: Fraud Investigation! (Course 2 of 4)

Explore how employees commit check tampering to divert organization funds by fraudulently preparing or intercepting checks, including forged maker, forged endorsement, altered payee, concealed cheque, and authorised maker schemes.

Investigate forged maker schemes that use forged signatures and blank checks to commit check tampering, and learn practical controls like daily reconciliation to prevent fraud.

Explore forged endorsement fraud where a signed company check is intercepted and the payee's signature forged to cash it; ensure separation of check creation, signing, and delivery.

Explore altered payee frauds, including check interception, payee modification, and erasable ink, and learn internal controls to separate duties and verify reconciliations to detect fraud.

Explore how concealed cheque and authorized maker fraud occur, how high-level insiders abuse payables, and implement checks like dual signatures and vendor-list reviews to detect and deter fraud.

Fraudsters conceal cheque tampering by altering payees and records, intercepting checks, and altering bank statements during the bank reconciliation process to create duplicate payments.

Explore how electronic payment processing can still enable fraud through access abuse and social engineering, and learn to enforce separation of duties, credential security, and idle log-off to prevent tampering.

Examine a 2019 check-tampering case where an employee forged blank checks with a signature stamp, and learn to secure checks and restrict access to prevent fraud.

Explore how payroll fraud operates as a pyramid scheme, with employees initiating false compensation claims to siphon funds, including ghost employees, falsified hours, and salary and commission schemes.

Explore ghost employees who are added to payroll, falsify timekeeping, and cash fraudulent paychecks, often through authority abuse and forged approvals, with prevention through separation of duties.

Examine how falsified hours and wage-rate changes drive payroll fraud via manual or computerized time cards, and learn prevention through separation of duties, supervisor checks, and detection strategies.

Explore how commission fraud arises from falsified sales and inflated commission rates, including fictitious customers and altered documents. Use regular checks to compare commissions with sales and verify customers.

Analyze a real ghost employee payroll fraud case to reveal how lack of separation of duties enables theft and how internal controls prevent such fraud.

Examine expense reimbursement frauds where employees claim false or inflated expenses and avoid oversight; identify four abuse methods—mischaracterized, overstated, fictitious, and multiple reimbursements—and the role of receipts in proving expenses.

Identify mischaracterized expense reimbursements by enforcing detailed receipts, dates, times, and purpose, and apply independent reviews plus clear policies and quarterly comparisons to detect fraud.

Explore how overstated expense reimbursements occur in fraud schemes, from falsified receipts and over purchasing to petty cash, and learn controls like original receipts and regular expense comparisons.

examine fictitious expense reimbursements and multiple reimbursement frauds, identify red flags, and implement policy controls for original receipts and supporting documentation. learn how to enforce approvals and prevent double dipping.

Highlight how fictitious expense reimbursement fraud arises when no receipts are provided and thresholds are exploited, and propose mandatory authorization and stricter receipt verification to prevent it.

Identify register disbursement fraud schemes, including false refunds and false voids, where fraudsters present bogus disbursements on the registry tape as legitimate to steal cash.

Explore how false refunds allow fraudsters to steal cash, inflate inventory, and use credit card refunds to avoid cash handling and enable kickback schemes.

Examine false voids as a form of fictitious refunds, where a receipt copy and a supervisor-approved void slip enable fraud through forged signatures or collusion.

Explore how fraudsters conceal register disbursements by stealing cash and creating inventory shortages, and how perpetual and periodic inventory systems reveal discrepancies and red flags.

Establish separation of duties and require management approval for refunds and voids to prevent cashier reversals, with separate cashier logins and documented transactions; monitor refunds near thresholds and encourage receipts.

Analyze a real false returns fraud case in Virginia where a nonemployee swapped high-value items for cheaper ones, causing losses. Implement audits and item-by-item return reviews to prevent such fraud.

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