Forensic Accounting Chapter 5

5 forensic accounting 12 definition of a ponzi scheme

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Unformatted text preview: heme” Any scam that pays “early investors” a return on their investment with the proceeds obtained from the “later investors.” investors.” Chapter 5 Forensic Accounting 13 Profile Of A Fraudster Profile • Male • Greedy • Risk Taker • Intelligent • Egotistical • Inquisitive • Under Stress • Big Spender • Rule Breaker • Hard Working • Disgruntled Employee • In Need of Financial Help • Inappropriate Relationships • Overwhelming Desire for Personal Gain Chapter 5 Forensic Accounting 14 Characteristics Of Fraud Perpetrators Perpetrators Those having experienced failure are more likely to Those cheat. cheat. People who are disliked tend to be more deceitful Those who dislike themselves tend to be more Those deceitful deceitful Individuals who are impulsive, distractible, unable to postpone gratification are more likely to engage in deceitful crimes to Chapter 5 Having a conscience makes Having you more resistant to temptation you Forensic Accounting 15 Characteristics Of Fraud Perpetrators Perpetrators Intelligent people tend to be more honest Middle and upper-middle class tend to be more Middle honest honest The easier it is to cheat and steal, The the more people will do so the Individuals have different needs which creates Individuals different levels at which they will lie, cheat or steal steal Lying, cheating and stealing increase when people have great pressure to achieve important objectives important Chapter 5 Forensic Accounting 16 The Perpetrators The 42.1% 39.7 % 41.2% 41.0% 37.1 % 39.5% 2010 2008 2006 16.9% 23.3 % 19.3% ©2010 by the Association of Certified Fraud Examiners, Inc. The Perpetrators – Median Loss Loss $80,000 $70,000 $78,000 2010 $200,00 0 $150,00 0 $218,00 0 2008 2006 $723,00 0 $834,00 0 $1,000,00 0 ©2010 by the Association of Certified Fraud Examiners, Inc. Age of Perpetrator — Median Loss Age $1,000,000 $800,00 0 $600,00 0 $400,00 0 $200,00 0 $0 2010 2008 <26 26 30 31 35 36 40 41 45 46 50 51 55 56 60 >60 Education of Perpetrator — Median Loss Education $300,00 0 $425,00 0 $234,00 0 $210,00 0 $200,00 0 $136,00 0 $196,00 0 $200,00 0 $550,00 0 2010 2008 2006 $100,00 0 ©2008 by the Association of Certified Fraud Examiners, Inc. Discrepancies That May Indicate Fraud Fraud • Transactions that are not recorded in a Transactions complete or timely manner or are improperly recorded. recorded. • Unsupported or unauthorized balances or Unsupported transactions. transactions. • Last-minute adjustments that significantly Last-minute affect financial results. affect • Evidence of employees’ access to systems and Evidence records inconsistent with that necessary to perform their authorized duties. perform Chapter 5 Forensic Accounting 21 Fraud Hypothesis Fraud A technique that attempts to detect technique fraud that is still undiscovered fraud 1.Identify frauds that may exist 2.Formulate null hypotheses stating Formulate the frauds do not exist the 3.Identify the red flags that...
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This note was uploaded on 09/09/2013 for the course ACC 468 taught by Professor James during the Fall '12 term at SIU Carbondale.

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