Fraud Risk Assessment and Vulnerability final

Take cash without recording transaction or recording

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Take cash without recording transaction, or recording a fictitious payment on a recievable. evidence. Use another employees access codes when committing theft. Collude 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 incurred 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 "borrowing" the funds, or feel like the money they're taking is deserved. No surveillance of employess. No separation between who handles cash and recievables. Leads to an understated total asset 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 effort 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 current assets increase. Also look for period where cash collections are significantly lower than reported revenues. Larceny- funds are stolen after they have been recorded on the books. Funds usually 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 access codes when committing theft. Collude 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 incurred 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 access code for people to use the register, lack of video surveillance. safeguarded. Request copies of checks and see if they are made payable to "cash" or "bearer" as opposed to a specific person or purpose. Identify if checks are made payable to employees that have Fraudulent Disbursements- can include billing schemes where a fictitious vendor bills the company for services rendered and the cash is removed from business by perpetrator. Can also include check tampering and payroll schemes where a fictitious employee recieves benefits that are used by the perpetrator.
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