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Fraud Risk Assessment and Vulnerability final

Skimming funds taken by an employee before the funds

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Unformatted text preview: Skimming- funds taken by an employee before the funds are recorded in organization's books Employees with acces to the pet y cash funds account. Cashiers and employees that may have legitimate or il egitemate access to the location of the cash. Take cash without recording transaction, or recording a fictitious payment on a recievable. evidence. Use another employees acces codes when commit ing theft. Col ude with people who are lifestyle of a particular employee. Mood swings. An employee chosing not to use vaction time. Most asset misappropriation frauds are caused by a percieved financial needs. A perpetrator may have incur ed unexpected expenses or lost a revenue stream. The perpetrator may also be pressured to commit the fraud by either an outside party, relative, friend, or coworker. A senior worker may threaten a perpetrator with punishment if they do not go along with the fraud. The employee might either be "bor owing" the funds, or feel like the money they're taking is deserved. No surveil ance of employes . No separation between who handles cash and recievables. Leads to an understated total as et balance. Revenues may be declining or flat when compared to other businesses in the same industry. The perpetrator may be increasing the number of recorded cash sales in an ef ort to steal more funds, and as such the ratio of cash sales out of total sales may be increasing. Look for cash decreasing while total cur ent assets increase. Also look for period where cash col ections are significantly lower than reported revenues. Larceny- funds are stolen after they have been recorded on the books. Funds usual y stolen from registers and on hand cash funds. Larceny can be perpetrated by any employee or party otherwise related to an employee that has access or knowledge of the location of the cash on hand. This extends to cashiers, other employees, and friends and family of an employees. Taking company cash or asets. evidence. Use another employees acces codes when commit ing theft. Col ude with people who are Change in lifestyle of a particular employee. Mood swings. Most asset misappropriation frauds are caused by a percieved financial needs. A perpetrator may have incur ed unexpected expenses or lost a revenue stream. The perpetrator may also be pressured to commit the fraud by either an outside party, relative, friend, or coworker. A senior worker may threaten a perpetrator with punishment if they do not go along with the fraud. An employee feels entitled to to the funds, and feels that no person is harmed by the theft. No locks on cash registers, no acces code for people to use the register, lack of video surveil ance. safeguarded. Request copies of checks and see if they are made payable to "cash" or "bearer" as opposed to a specific person or purpose....
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