Please enable JavaScript.
Coggle requires JavaScript to display documents.
Asset Misappropriation: Fraudulent Disbursements - Coggle Diagram
Asset Misappropriation: Fraudulent Disbursements
Types
Billing schemes
Payroll schemes
Electronic payment schemes
Expense reimbursement schemes
Register disbursement schemes
Register disbursement schemes
Expense reimbursement schemes
Types
Overstated expense reimbursements
Fictitious expense reimbursements
Mischaracterized expense reimbursements
Multiple reimbursements
Prevention and Detection
Review and analyze expense accounts
Historical comparisons
Comparisons with budgeted
Require detailed expense reports, and conduct a close review
Billing schemes
Invoicing via shell companies
Forming a shell company
Purchases of services rather than goods
Pass-through schemes
Invoicing via nonaccomplice vendors
Personal purchases with company funds
Prevention and Detection
Detection methods
Analytical review, data analytics, statistical sampling,
vendor or outsider complaints, site visits, and audit programs
Prevention methods
Employee education and training
Payroll schemes
Ghost employees
Scheme requirements
Timekeeping and wage rate information must be collected
A paycheck must be issued to the ghost
The check must be delivered to the perpetrator or an accomplice
The ghost must be added to the payroll
Ghost employee
refers to someone on the payroll who does not
actually work for the victim company.
Prevention and Detection
Detection methods
- independent payroll distribution, analysis of payee address or accounts, duplicate identification numbers, overtime authorization, commissions, and analysis of deductions from payroll checks,
Prevention methods
- separation of duties (payroll preparation, payroll disbursement, payroll distribution, payroll bank reconciliations, and HR functions)
Electronic payment schemes
Types
Overstated expense reimbursements
Fictitious expense reimbursements
Mischaracterized expense reimbursements
Multiple reimbursements
Prevention and Detection
Review and analyze expense accounts
Require detailed expense reports, and conduct a close review of them
When possible, require that employees submit original paper receipts