Forensic Accounting Chapter 5

Exist 2formulate null hypotheses stating formulate

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Unformatted text preview: each fraud Identify red would create would 4.Design queries to search for the red Design flags flags Chapter 5 Forensic Accounting 23 Fraud Hypothesis Liquor Sales Tax Example Liquor 1. Obtain customer’s liquor purchase Obtain history from liquor distributor history 2. Compare customer’s liquor purchases Compare to liquor sales reported on sales tax returns returns Chapter 5 Red Flag: Discrepancy could yield unreported sales to reduce tax liability unreported Forensic Accounting 24 Fraud Hypothesis Liquor Sales Tax Example Liquor What conditions or What Other elements could render this Fraud Hypothesis invalid ? invalid Chapter 5 Forensic Accounting 25 Penne ala Vodka Veal Marsala Chicken Marsala Osso Bucco Osso Veal Franchise Veal Chapter 5 Forensic Accounting 26 Types Of Misappropriation Misappropriation s Chapter 5 Forensic Accounting 27 Types of Misappropriations Types • Embezzlement • Cash & Check Schemes • Accounts Receivable Fraud • Inventory Fraud • Accounts Payable Fraud • Fictitious Disbursements Chapter 5 Forensic Accounting 28 Embezzlement Embezzlement The fraudulent appropriation of money or property lawfully in one’s possession to be used personally by the embezzler. personally An embezzler An steals from their employer ! steals Chapter 5 Forensic Accounting 29 Annette Yeomans Embezzlement Alleged; 400 Pairs of Shoes Cited Vista California - March 8, 2009 A former bookkeeper embezzled $9.9 million, forcing her company to make layoffs as she bought 400 pairs of shoes that she kept in a room-sized closet decorated with a crystal chandelier and a plasma television authorities claim. Annette Yeomans, 51 was booked for investigation of grand theft and embezzlement. 30 Ca$h & Check Schemes Note: Reference Textbook Section 5031 Chapter 5 Chapter Forensic Accounting 31 Ca$h & Check Schemes Schemes Larceny of Ca$h Larceny Skimming Swapping Checks for Ca$h Check Tampering Kiting Credit Card Refund & Cancellation Credit Schemes Schemes Chapter 5 Forensic Accounting 32 Larceny of Ca$h Larceny The theft of ca$h The after the cash has been recorded On the Books, On In the Cash Register, Or Petty Cash Chapter 5 Forensic Accounting 33 Larceny of Ca$h Larceny $1,000 Check $350 Cash $1,000 Check $444 Stamps Chapter 5 Forensic Accounting 35 How Is Larceny of Ca$h Caught ? of Segregation of Duties Segregation Timely Reconciliations Surprise Ca$h Counts Surprise Bait – Marked / Recorded Money Bait Chapter 5 Forensic Accounting 36 Skimming Skimming An “off book” technique to remove cash before a company records the receipts. the Unrecorded Sale Understated Sale Understated Ring NO SALE NO Chapter 5 Forensic Accounting 37 How Is Skimming Caught ? Skimming Pre-Numbered Receipts Pre-Numbered Reconciliation To Identify Missing Reconciliation Receipts Receipts Surveillance – Surprise Ca$h Surveillance Counts Counts Trend Analysis Chapter 5 Forensic Accounting 38 Swapping Checks for Ca$H Checks The employee removes cash from the...
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