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Fraud Risk Assessment and Vulnerability final

Fraudulent disbursements can be perpetrated by

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Fraudulent disbursements can be perpetrated by employees with access to the payable accounts. Employees who can access the system to manipulate payroll and vendor payable accounts. Check tampering can also be carried out by those responsible for handling the checks at any point during their lifetime. Those who write the checks, deposit, or endorse them may have the opportunity to commit this fraud. Steal company checks and increase the valuable of expenses such as legal expenses and advertising expenses to cover the costs. Creating fictitious vendor and billing the company for fake services rendered, pocketing the cash. Using terminated or fictitious employees to get benefits. Avoid actions that create documentary or physical evidence. Use another employees access codes when committing theft. Collude with people who are responsible for internal controls that would stop the fraud. Change in 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. An employee may be unhappy with the company, have excessive debt or liens on their property. No person is harmed by the thefts. No seperation between who is responsible for the cash and payable accounts. No direct deposit used for the payroll. The same person may endorse and cash checks. There may be an increase in expense and payable accounts related to new vendors. Payroll expense account may remain constant during a period of lay offs. In the case of a company that has sales representatives paid on commission and aging of the recievables associated with certain representatives recieving commissions could indicate these reps do not exist. identify if there are aging recievable accounts and who may be associated with these accounts. It is possible these employees are non-existant. Create a period of invigilation where you require employees to come pick up their checks. Verify names and addresses of vendors are valid. have vendors furnish identification proving their identity in order to identify those that may not be real. check vendor addresses versus employee information to make sure there are no common occurences. Non-Cash Misappropriation- theft of non cash assets such as inventory for an employees personal use. Warehouse and delivery employees have the access necessary to steal asets. Sales representatives and any other employees knowledgeable about the location of assets may have the opportunity to commit this fraud.
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