Indice manual de certificación ACFE
•
3 likes•1,800 views
Índice en Español de la versión internacional del Manual de certificación de la ACFE, hoy en día el referente profesional por excelencia en materia de compliance y fraude a nivel mundial.
Recommended
More Related Content
What's hot
What's hot (14)
Similar to Indice manual de certificación ACFE
Similar to Indice manual de certificación ACFE (20)
More from Andres Baytelman
More from Andres Baytelman (20)
Recently uploaded
Recently uploaded (20)
Indice manual de certificación ACFE
- 1. Fraud Examiners Manual 2011 International Edition Select a section below to view its chapters: ŒŒ Main Table of Contents ŒŒ Law ŒŒ Preface and Introduction ŒŒ Investigation ŒŒ Financial Transactions ŒŒ Fraud Prevention & & Fraud Schemes Deterrence SEARCH ŒŒ Copyright and Bibliography ©2011 Association of Certified Fraud Examiners. All rights reserved. The ACFE logo is a trademark owned by the Association of Certified Fraud Examiners, Inc.
- 2. Fraud Examiners Manual 2011 International Edition financial transactions & fraud schemes HOME | FINANCIAL TRANSACTIONS & FRAUD SCHEMES | LAW | INVESTIGATION | FRAUD PREVENTION & DETERRENCE | SEARCH ŒŒ Table of Contents ŒŒ Asset Misappropriation: ŒŒ Cheque and Credit Card Fraud Fraudulent Disbursements ŒŒ Accounting Concepts ŒŒ Insurance Fraud ŒŒ Asset Misappropriation: ŒŒ Management’s and Auditors’ Inventory and Other Assets ŒŒ Health Care Fraud Responsibilities ŒŒ Bribery and Corruption ŒŒ Consumer Fraud ŒŒ Financial Statement Fraud ŒŒ Theft of Intellectual Property ŒŒ Computer and Internet Fraud ŒŒ Asset Misappropriation: Cash Receipts ŒŒ Financial Institution Fraud ŒŒ Public Sector Fraud ©2011 Association of Certified Fraud Examiners. All rights reserved. The ACFE logo is a trademark owned by the Association of Certified Fraud Examiners, Inc.
- 3. Fraud Examiners Manual 2011 International Edition law HOME | FINANCIAL TRANSACTIONS & FRAUD SCHEMES | LAW | INVESTIGATION | FRAUD PREVENTION & DETERRENCE | SEARCH ŒŒ Table of Contents ŒŒ Individual Rights ŒŒ Overview of the Legal System ŒŒ The Civil Justice System ŒŒ The Law Related to Fraud ŒŒ The Criminal Justice System ŒŒ Bankruptcy (Insolvency) Fraud ŒŒ Evidence ŒŒ Securities Fraud ŒŒ Testifying as a Witness ŒŒ Money Laundering ©2011 Association of Certified Fraud Examiners. All rights reserved. The ACFE logo is a trademark owned by the Association of Certified Fraud Examiners, Inc.
- 4. Fraud Examiners Manual 2011 International Edition investigation HOME | FINANCIAL TRANSACTIONS & FRAUD SCHEMES | LAW | INVESTIGATION | FRAUD PREVENTION & DETERRENCE | SEARCH ŒŒ Table of Contents ŒŒ Digital Forensics ŒŒ Analysing Documents ŒŒ Tracing Illicit Transactions ŒŒ Interview Theory and Application ŒŒ Reporting Standards ŒŒ Covert Examinations ŒŒ Fraud Examination Checklist ŒŒ Sources of Information ŒŒ Sample Reports ŒŒ Accessing Information Online ŒŒ Engagement Contracts and Opinion Letters ŒŒ Data Analysis and Reporting Tools ©2011 Association of Certified Fraud Examiners. All rights reserved. The ACFE logo is a trademark owned by the Association of Certified Fraud Examiners, Inc.
- 5. Fraud Examiners Manual 2011 International Edition fraud prevention & deterrence HOME | FINANCIAL TRANSACTIONS & FRAUD SCHEMES | LAW | INVESTIGATION | FRAUD PREVENTION & DETERRENCE | SEARCH ŒŒ Table of Contents ŒŒ Fraud Prevention Programs ŒŒ Understanding Human Behaviour ŒŒ Fraud Risk Assessment ŒŒ Theories of Crime Causation ŒŒ Ethics for Fraud Examiners ŒŒ White-Collar Crime ŒŒ ACFE Code of Professional Ethics ŒŒ Organisational Crime ŒŒ CFE Code of Professional Standards ŒŒ Occupational Fraud ©2011 Association of Certified Fraud Examiners. All rights reserved. The ACFE logo is a trademark owned by the Association of Certified Fraud Examiners, Inc.
- 6. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES FRAUD EXAMINERS MANUAL INTERNATIONAL VERSION TABLE OF CONTENTS OCCUPATIONAL FRAUDS ACCOUNTING CONCEPTS Accounting Basics ........................................................................................................................ 1.101 Accounts and the Accounting Cycle .................................................................................. 1.102 Journal Entries ....................................................................................................................... 1.104 Accounting Methods ............................................................................................................ 1.104 Financial Statements .................................................................................................................... 1.105 Balance Sheet ......................................................................................................................... 1.106 Income Statement ................................................................................................................. 1.108 Statement of Owners’ Equity .............................................................................................. 1.110 Statement of Cash Flows ..................................................................................................... 1.112 Cash Flows from Operations ....................................................................................... 1.113 Cash Flows from Investing Activities ......................................................................... 1.114 Cash Flows from Financing Activities ........................................................................ 1.114 Users of Financial Statements ............................................................................................. 1.114 MANAGEMENT'S AND AUDITORS' RESPONSIBILITIES Management .................................................................................................................................. 1.201 The Treadway Commission ................................................................................................. 1.201 Mandatory Independent Audit Committee ................................................................ 1.202 Written Charter ............................................................................................................... 1.202 Resources and Authority ............................................................................................... 1.202 Informed, Vigilant, and Effective Audit Committees ............................................... 1.202 The COSO Reports .............................................................................................................. 1.202 Internal Control—Integrated Framework .................................................................. 1.202 Enterprise Risk Management—Integrated Framework............................................ 1.203 COSO Guidance for Smaller Public Companies ....................................................... 1.204 Document Retention Policies .............................................................................................. 1.205 What Documents Should Be Kept? ............................................................................ 1.206 Document Storage.......................................................................................................... 1.206 Document Destruction .................................................................................................. 1.207 DRP Managers ................................................................................................................ 1.207 Fraud Prevention Programs ................................................................................................. 1.207 Corporate Governance ................................................................................................................ 1.208 The Importance of Corporate Governance ...................................................................... 1.208 The Organisation for Economic Cooperation and Development ................................. 1.208 2011 Fraud Examiners Manual (International) 1.i
- 7. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES MANAGEMENT'S AND AUDITORS' RESPONSIBILITIES (CONT.) The OECD Principles of Corporate Governance..................................................... 1.209 External Auditors ......................................................................................................................... 1.220 International Standard on Auditing (ISA) 240, The Auditor’s Responsibility to Consider Fraud in the Audit of Financial Statements ........................................................ 1.220 Purpose of the Standard ................................................................................................ 1.220 Characteristics of Fraud ................................................................................................. 1.220 Responsibility for the Prevention and Detection of Fraud ...................................... 1.223 Responsibilities of the Auditor ..................................................................................... 1.223 Objectives ........................................................................................................................ 1.224 Definitions ....................................................................................................................... 1.224 Professional Scepticism ................................................................................................. 1.225 Discussion Among the Engagement Team ................................................................ 1.225 Risk Assessment Procedures and Related Activities ................................................. 1.225 Identification and Assessment of the Risks of Material Misstatement Due to Fraud ............................................................................................................... 1.228 Responses to the Assessed Risks of Material Misstatement Due to Fraud ........... 1.229 Evaluation of Audit Evidence ...................................................................................... 1.230 Auditor Unable to Continue the Engagement ........................................................... 1.231 Management Representations ....................................................................................... 1.232 Communications to Management and with Those Charged with Governance .... 1.232 Communications to Regulatory and Enforcement Authorities ............................... 1.233 Documentation ............................................................................................................... 1.233 Appendix ......................................................................................................................... 1.234 International Principles for Auditor Oversight ................................................................ 1.236 The International Organisation of Securities Commissions’ Principles for Auditor Oversight ............................................................................................... 1.237 The Public Interest Oversight Board ......................................................................... 1.244 International Standards for Government Auditing .......................................................... 1.245 The International Organisation of Supreme Audit Institutions ............................. 1.245 Professional Framework ................................................................................................ 1.245 Internal Auditors .......................................................................................................................... 1.254 Standard 1210—Proficiency ................................................................................................ 1.254 1210.A2 ............................................................................................................................ 1.254 Standard 1220—Due Professional Care ............................................................................ 1.254 1220.A1 ............................................................................................................................ 1.255 1220.A3 ............................................................................................................................ 1.255 Standard 2110—Governance .............................................................................................. 1.255 2110.A1 ............................................................................................................................ 1.255 Standard 2120—Risk Management .................................................................................... 1.256 2120.A1 ............................................................................................................................ 1.256 2120.A2 ............................................................................................................................ 1.256 Standard 2130—Control ...................................................................................................... 1.256 1.ii 2011 Fraud Examiners Manual (International)
- 8. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES MANAGEMENT'S AND AUDITORS' RESPONSIBILITIES (CONT.) 2130.A1 ............................................................................................................................ 1.256 Standard 2210—Engagement Objectives .......................................................................... 1.256 2110.A1 ............................................................................................................................ 1.256 2110.A2 ............................................................................................................................ 1.257 IIA's IPPF—Practice Guide: Internal Auditing and Fraud ..................................................... 1.257 Internal Audit's Role in Fighting Fraud ...................................................................... 1.257 Other Roles and Responsibilities for Fraud Prevention and Detection................. 1.258 Certified Fraud Examiners.......................................................................................................... 1.259 Help Resolve Allegations of Fraud ..................................................................................... 1.259 Obtain Evidence .................................................................................................................... 1.259 Take Statements..................................................................................................................... 1.260 Write Reports ......................................................................................................................... 1.260 Testify to Findings ................................................................................................................ 1.260 Assist in the Detection and Prevention of Fraud ............................................................. 1.260 FINANCIAL STATEMENT FRAUD What Is Financial Statement Fraud? ......................................................................................... 1.303 Why Financial Statement Fraud Is Committed ....................................................................... 1.303 Trends in Financial Statement Fraud ........................................................................................ 1.305 Financial Statement Fraud Schemes .......................................................................................... 1.305 Fictitious Revenues ............................................................................................................... 1.306 Sales with Conditions ..................................................................................................... 1.307 What Red Flags Are Associated with Fictitious Revenues? ..................................... 1.307 Timing Differences (Including Premature Revenue Recognition) ................................ 1.308 Premature Revenue Recognition .................................................................................. 1.308 Long-Term Contracts .................................................................................................... 1.310 Channel Stuffing ............................................................................................................. 1.310 Recording Expenses in the Wrong Period ................................................................. 1.311 What Red Flags Are Associated with Timing Differences (Including Premature Revenue Recognition)? ........................................................................... 1.311 Improper Asset Valuation .................................................................................................... 1.312 Inventory Valuation ....................................................................................................... 1.312 Accounts Receivable ...................................................................................................... 1.313 Business Combinations.................................................................................................. 1.314 Fixed Assets..................................................................................................................... 1.314 Understating Assets........................................................................................................ 1.316 Misclassifying Assets ...................................................................................................... 1.316 What Red Flags Are Associated with Improper Asset Valuation?.......................... 1.316 Concealed Liabilities and Expenses .................................................................................... 1.316 Liability/Expense Omissions ....................................................................................... 1.317 Capitalised Expenses ...................................................................................................... 1.319 2011 Fraud Examiners Manual (International) 1.iii
- 9. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES FINANCIAL STATEMENT FRAUD (CONT.) What Red Flags Are Associated with Concealed Liabilities and Expenses?.......... 1.320 Improper Disclosures ........................................................................................................... 1.321 Liability Omissions ......................................................................................................... 1.321 Subsequent Events ......................................................................................................... 1.321 Related-Party Transactions ........................................................................................... 1.322 Accounting Changes ...................................................................................................... 1.323 What Red Flags Are Associated with Improper Disclosures? ................................. 1.323 What Red Flags Are Associated with Financial Statement Fraud Generally? ..................... 1.324 Detection of Fraudulent Financial Statement Schemes ......................................................... 1.325 Financial Statement Analysis ...................................................................................................... 1.327 Percentage Analysis—Horizontal and Vertical ................................................................. 1.328 Vertical Analysis Discussion ......................................................................................... 1.329 Horizontal Analysis Discussion.................................................................................... 1.330 Ratio Analysis......................................................................................................................... 1.330 Common Financial Ratios ............................................................................................. 1.331 Tax Return Review ................................................................................................................ 1.334 Interviews in Fraudulent Financial Statement Cases .............................................................. 1.334 Interviewing Techniques ...................................................................................................... 1.335 The Interview .................................................................................................................. 1.337 Prevention of Financial Statement Fraud ................................................................................. 1.343 Internal Auditors ................................................................................................................... 1.343 Management ........................................................................................................................... 1.343 Reduce the Situational Pressures that Encourage Financial Statement Fraud ...... 1.343 Reduce the Opportunity to Commit Fraud ................................................................ 1.344 Reduce the Rationalisation of Fraud—Strengthen Employee Personal Integrity ........................................................................................................ 1.344 ASSET MISAPPROPRIATION: CASH RECEIPTS Skimming ....................................................................................................................................... 1.401 Sales Skimming ...................................................................................................................... 1.402 Register Manipulation .................................................................................................... 1.404 Skimming During Nonbusiness Hours ....................................................................... 1.405 Skimming of Off-Site Sales ........................................................................................... 1.405 Poor Collection Procedures .......................................................................................... 1.406 Understated Sales ........................................................................................................... 1.407 Theft of Cheques Received Through the Mail........................................................... 1.409 Cheque for Currency Substitutions .................................................................................... 1.411 Skimming Receivables .......................................................................................................... 1.412 Forcing Account Balances or Destroying Transaction Records ............................. 1.412 Lapping ............................................................................................................................ 1.413 Stolen Statements ........................................................................................................... 1.414 1.iv 2011 Fraud Examiners Manual (International)
- 10. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES ASSET MISAPPROPRIATION: CASH RECEIPTS (CONT.) False Account Entries .................................................................................................... 1.415 Inventory Padding ................................................................................................................. 1.416 Detection of Skimming Schemes ........................................................................................ 1.417 Receipt or Sales Level Detection.................................................................................. 1.417 Journal Entry Review ..................................................................................................... 1.417 Detecting Lapping of Sales or Receivables ................................................................. 1.417 Prevention of Skimming Schemes ...................................................................................... 1.418 Receipt or Sales Level Control ..................................................................................... 1.418 General Controls ............................................................................................................ 1.418 Skimming Controls......................................................................................................... 1.418 Cash Larceny................................................................................................................................. 1.419 Incoming Cash ....................................................................................................................... 1.420 Theft of Cash from the Register .................................................................................. 1.420 Other Larceny of Sales and Receivables ..................................................................... 1.423 Cash Larceny from the Deposit .......................................................................................... 1.424 Deposit Lapping ............................................................................................................. 1.428 Deposits in Transit ......................................................................................................... 1.428 Detection of Cash Larceny .................................................................................................. 1.428 Receipt Recording .......................................................................................................... 1.428 Control Objectives ......................................................................................................... 1.429 Analytical Review ........................................................................................................... 1.429 Detection at the Register ............................................................................................... 1.430 Cash Account Analysis .................................................................................................. 1.430 Prevention of Cash Larceny ................................................................................................ 1.430 Segregation of Duties ..................................................................................................... 1.430 Assignment Rotation and Mandatory Vacations ....................................................... 1.431 Surprise Cash Counts and Procedure Supervision .................................................... 1.431 Physical Security of Cash ............................................................................................... 1.431 ASSET MISAPPROPRIATION: FRAUDULENT DISBURSEMENTS Register Disbursement Schemes ................................................................................................ 1.501 False Refunds ......................................................................................................................... 1.501 Fictitious Refunds........................................................................................................... 1.503 Overstated Refunds........................................................................................................ 1.503 Credit Card Refunds ...................................................................................................... 1.503 False Voids ............................................................................................................................. 1.504 Concealing Register Disbursement Schemes .................................................................... 1.507 Small Disbursements...................................................................................................... 1.508 Destroying Records ........................................................................................................ 1.508 Detection of Register Disbursement Schemes ................................................................. 1.508 Fictitious Refunds or Voided Sales .............................................................................. 1.508 2011 Fraud Examiners Manual (International) 1.v
- 11. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES ASSET MISAPPROPRIATION: FRAUDULENT DISBURSEMENTS (CONT.) Review and Analysis of Decreases in Gross Sales and/or Increases in Returns and Allowances ............................................................................................. 1.509 Register Disbursement Scheme Red Flags ................................................................. 1.509 Prevention of Register Disbursement Schemes................................................................ 1.510 Cheque Tampering Schemes ...................................................................................................... 1.510 Forged Maker Schemes ........................................................................................................ 1.511 Obtaining the Cheque .................................................................................................... 1.511 To Whom Is the Cheque Made Payable?.................................................................... 1.512 Forging the Signature ..................................................................................................... 1.514 Converting the Cheque .................................................................................................. 1.516 Forged Endorsement Schemes ........................................................................................... 1.516 Intercepting Cheques Before Delivery ........................................................................ 1.516 Theft of Returned Cheques .......................................................................................... 1.518 Re-Routing the Delivery of Cheques ........................................................................... 1.519 Converting the Stolen Cheque...................................................................................... 1.519 Altered Payee Schemes ......................................................................................................... 1.520 Altering Cheques Prepared by Others: Inserting a New Payee ............................... 1.520 Altering Cheques Prepared by Others: “Tacking On” ............................................. 1.522 Altering Cheques Prepared by the Fraudster: Erasable Ink ..................................... 1.522 Altering Cheques Prepared by the Fraudster: Blank Cheques ................................. 1.523 Converting Altered Cheques......................................................................................... 1.523 Authorised Maker Schemes ................................................................................................. 1.523 Overriding Controls Through Intimidation ............................................................... 1.524 Poor Controls.................................................................................................................. 1.526 Concealing Cheque Tampering Schemes........................................................................... 1.526 The Fraudster Reconciling the Bank Statement ........................................................ 1.527 Re-Alteration of Cheques .............................................................................................. 1.528 Miscoding Fraudulent Cheques .................................................................................... 1.528 Re-Issuing Intercepted Cheques .................................................................................. 1.529 Bogus Supporting Documents ..................................................................................... 1.530 Detection of Cheque Tampering Schemes ........................................................................ 1.530 Account Analysis Through Cut-Off Statements ....................................................... 1.530 Bank Reconciliations ...................................................................................................... 1.530 Bank Confirmation ......................................................................................................... 1.531 Cheque-Tampering Red Flags ...................................................................................... 1.531 Prevention of Cheque Tampering Schemes ...................................................................... 1.532 Cheque Disbursement Controls ................................................................................... 1.532 Bank-Assisted Controls ................................................................................................. 1.533 Physical Tampering Prevention .................................................................................... 1.533 Cheque Theft Control Procedures ............................................................................... 1.534 Billing Schemes ............................................................................................................................. 1.534 Invoicing Via Shell Companies ........................................................................................... 1.535 1.vi 2011 Fraud Examiners Manual (International)
- 12. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES ASSET MISAPPROPRIATION: FRAUDULENT DISBURSEMENTS (CONT.) Forming a Shell Company ............................................................................................. 1.535 Submitting False Invoices ............................................................................................. 1.537 Self-Approval of Fraudulent Invoices ......................................................................... 1.538 “Rubber Stamp” Supervisors ........................................................................................ 1.538 Reliance on False Documents ...................................................................................... 1.539 Collusion .......................................................................................................................... 1.539 Purchases of Services Rather than Goods .................................................................. 1.539 Pass-Through Schemes .................................................................................................. 1.540 Invoicing Via Nonaccomplice Vendors ............................................................................. 1.540 Pay-and-Return Schemes............................................................................................... 1.540 Overbilling with a Nonaccomplice Vendor’s Invoices ............................................. 1.542 Personal Purchases With Company Funds........................................................................ 1.542 Personal Purchases Through False Invoicing ............................................................ 1.542 Personal Purchases on Credit Cards or Other Company Accounts ....................... 1.545 Detection ................................................................................................................................ 1.549 Analytical Review ........................................................................................................... 1.549 Computer-Assisted Analytical Review ........................................................................ 1.549 Statistical Sampling ......................................................................................................... 1.550 Vendor or Outsider Complaints .................................................................................. 1.550 Site Visits—Observation ............................................................................................... 1.550 Sample Audit Program .................................................................................................. 1.550 Prevention of Billing Schemes ............................................................................................ 1.552 Education (Training) ...................................................................................................... 1.553 Compensation ................................................................................................................. 1.553 Proper Documentation .................................................................................................. 1.553 Proper Approvals ........................................................................................................... 1.553 Segregation of Duties ..................................................................................................... 1.553 Hotlines ............................................................................................................................ 1.553 Competitive Bidding ...................................................................................................... 1.553 Prevention Checklist ...................................................................................................... 1.554 Payroll Fraud Schemes ................................................................................................................ 1.554 Ghost Employees .................................................................................................................. 1.555 Adding the Ghost to the Payroll .................................................................................. 1.555 Collecting Timekeeping Information .......................................................................... 1.558 Issuing the Ghost’s Paycheque ..................................................................................... 1.559 Delivery of the Paycheque ............................................................................................ 1.559 Falsified Hours and Salary ................................................................................................... 1.560 Manually Prepared Timecards ...................................................................................... 1.561 Time Clocks and Other Automated Timekeeping Systems ..................................... 1.565 Rates of Pay ..................................................................................................................... 1.565 Commission Schemes ........................................................................................................... 1.565 Fictitious Sales................................................................................................................. 1.565 2011 Fraud Examiners Manual (International) 1.vii
- 13. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES ASSET MISAPPROPRIATION: FRAUDULENT DISBURSEMENTS (CONT.) Altered Sales .................................................................................................................... 1.567 Altering Commission Rates .......................................................................................... 1.568 Detection of Payroll Schemes ............................................................................................. 1.568 Independent Payroll Distribution ................................................................................ 1.568 Analysis of Payee Address or Accounts ...................................................................... 1.568 Duplicate Identification Numbers ............................................................................... 1.568 Overtime Authorisation ................................................................................................ 1.568 Commissions ................................................................................................................... 1.568 Analysis of Deductions from Payroll Cheques .......................................................... 1.569 Other Detection Methods ............................................................................................. 1.569 Prevention of Payroll Schemes............................................................................................ 1.569 Segregation of Duties ..................................................................................................... 1.570 Periodic Review and Analysis of Payroll ..................................................................... 1.570 Indicators of Payroll Fraud ........................................................................................... 1.571 Expense Reimbursement Schemes ............................................................................................ 1.572 Mischaracterised Expense Reimbursements ..................................................................... 1.573 Overstated Expense Reimbursements ............................................................................... 1.576 Altered Receipts .............................................................................................................. 1.576 Overpurchasing............................................................................................................... 1.578 Overstating Another Employee’s Expenses ............................................................... 1.578 Orders to Overstate Expenses ..................................................................................... 1.578 Fictitious Expense Reimbursements .................................................................................. 1.579 Producing Fictitious Receipts ....................................................................................... 1.579 Obtaining Blank Receipts from Vendors.................................................................... 1.579 Claiming the Expenses of Others ................................................................................ 1.581 Multiple Reimbursements .................................................................................................... 1.581 Detection of Expense Reimbursement Schemes ............................................................. 1.582 Review and Analysis of Expense Accounts ................................................................ 1.582 Detailed Review of Expense Reports .......................................................................... 1.582 Prevention of Expense Reimbursement Schemes............................................................ 1.582 Detailed Expense Reports: Submission and Review ................................................. 1.582 ASSET MISAPPROPRIATION: INVENTORY AND OTHER ASSETS Misuse of Inventory and Other Assets ..................................................................................... 1.601 The Costs of Inventory Misuse ........................................................................................... 1.601 Theft of Inventory and Other Assets........................................................................................ 1.602 Larceny Schemes ................................................................................................................... 1.602 The False Sale.................................................................................................................. 1.605 Asset Requisitions and Transfers ........................................................................................ 1.605 Purchasing and Receiving Schemes .................................................................................... 1.606 Falsifying Incoming Shipments .................................................................................... 1.607 1.viii 2011 Fraud Examiners Manual (International)
- 14. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES ASSET MISAPPROPRIATION: INVENTORY AND OTHER ASSETS (CONT.) False Shipments of Inventory and Other Assets .............................................................. 1.607 Concealing Inventory Shrinkage ......................................................................................... 1.609 Altered Inventory Records ............................................................................................ 1.612 Fictitious Sales and Accounts Receivable ................................................................... 1.612 Write-Off of Inventory and Other Assets .................................................................. 1.613 Physical Padding ............................................................................................................. 1.613 Detection of Inventory Schemes ........................................................................................ 1.613 Statistical Sampling ......................................................................................................... 1.613 Perpetual Inventory Records ........................................................................................ 1.613 Shipping Documents ..................................................................................................... 1.614 Physical Inventory Counts ............................................................................................ 1.614 Analytical Review ........................................................................................................... 1.614 Computer-Generated Trend Analysis ......................................................................... 1.615 Detailed Audit Program ................................................................................................ 1.616 Prevention of Inventory Schemes ...................................................................................... 1.617 Proper Documentation .................................................................................................. 1.617 Segregation of Duties ..................................................................................................... 1.618 Independent Checks ...................................................................................................... 1.618 Physical Safeguards ........................................................................................................ 1.618 BRIBERY AND CORRUPTION Bribery ........................................................................................................................................... 1.701 Kickback Schemes................................................................................................................. 1.702 Diverting Business to Vendors..................................................................................... 1.704 Overbilling Schemes ...................................................................................................... 1.704 Other Kickback Schemes .............................................................................................. 1.706 Kickback Payments ........................................................................................................ 1.706 Bid-Rigging Schemes ............................................................................................................ 1.707 The Presolicitation Phase .............................................................................................. 1.707 The Solicitation Phase.................................................................................................... 1.711 The Submission Phase ................................................................................................... 1.712 Economic Extortion ............................................................................................................. 1.713 Illegal Gratuities..................................................................................................................... 1.713 Methods of Making Illegal Payments ................................................................................. 1.714 Gifts, Travel, and Entertainment ................................................................................. 1.714 Cash Payments ................................................................................................................ 1.714 Checks and Other Financial Instruments ................................................................... 1.715 Hidden Interests ............................................................................................................. 1.715 Loans ................................................................................................................................ 1.715 Payment of Credit Card Bills ........................................................................................ 1.715 Transfers at Other than Fair Market Value ................................................................ 1.715 2011 Fraud Examiners Manual (International) 1.ix
- 15. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES BRIBERY AND CORRUPTION (CONT.) Promises of Favourable Treatment ............................................................................. 1.715 Detection of Bribery Schemes ................................................................................................... 1.716 Red Flags of Bribery Schemes ............................................................................................. 1.716 The Corrupt Recipient ................................................................................................... 1.716 The Corrupt Payer .......................................................................................................... 1.717 General Purchasing ........................................................................................................ 1.717 Presolicitation .................................................................................................................. 1.717 Bid Solicitation ................................................................................................................ 1.718 Bid Submission or Contract Acceptance .................................................................... 1.719 Methods of Proving Corrupt Payments ............................................................................. 1.720 The Business Profile—Analysis ................................................................................... 1.720 Sources of Information for the Business Profile ....................................................... 1.722 Proving On-Book Payments................................................................................................ 1.722 Fictitious Disbursement Schemes ................................................................................ 1.722 Ghost Employee Schemes ............................................................................................ 1.726 Overbilling Schemes ...................................................................................................... 1.726 Proving Off-Book Payments ............................................................................................... 1.727 Indirect Evidence of Unrecorded Sales on the Suspect Company’s Books and Records ..................................................................................................... 1.727 Unbalanced Ratios of Costs to Sales ........................................................................... 1.727 Investigation in the Marketplace .................................................................................. 1.728 Proving Payments in Cash ............................................................................................ 1.728 Conflicts of Interest ..................................................................................................................... 1.730 Purchase Schemes ................................................................................................................. 1.732 Unique Assets ................................................................................................................. 1.734 Turnaround Sales ............................................................................................................ 1.735 Sales Schemes......................................................................................................................... 1.735 Underbillings ................................................................................................................... 1.735 Writing Off Sales ............................................................................................................ 1.736 Other Schemes....................................................................................................................... 1.736 Business Diversions ....................................................................................................... 1.736 Resource Diversions ...................................................................................................... 1.736 Financial Interest in Companies Under Perpetrator’s Supervision ......................... 1.737 Financial Disclosure ....................................................................................................... 1.737 Appearance of Conflict of Interest .............................................................................. 1.737 Detection of Conflicts of Interest ...................................................................................... 1.738 Tips and Complaints ...................................................................................................... 1.738 Comparison of Vendor Addresses with Employee Addresses ................................ 1.738 Review of Vendor Ownership Files ............................................................................ 1.738 Review of Exit Interviews and Comparisons of Vendor Addresses to Addresses of Subsequent Employers ....................................................................... 1.738 1.x 2011 Fraud Examiners Manual (International)
- 16. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES BRIBERY AND CORRUPTION (CONT.) Interviews of Purchasing Personnel for Favourable Treatment of One or More Vendors .............................................................................................................. 1.739 Policies Requiring Certain Employees to Provide the Names and Employers of Immediate Family Members............................................................. 1.739 Prevention of Conflicts of Interest ..................................................................................... 1.739 THEFT OF INTELLECTUAL PROPERTY Competitive Intelligence (CI) Versus Espionage .................................................................... 1.802 Open Sources of Information .................................................................................................... 1.803 Why Do Companies Resort to Corporate Espionage? .................................................... 1.804 The Bootstrap Effect ............................................................................................................ 1.806 The Intelligence Pyramid ............................................................................................................ 1.807 Fundamental Intelligence Techniques................................................................................ 1.807 Basic Sources.......................................................................................................................... 1.807 Industry Analyst Reports ............................................................................................... 1.808 Electronic Sources .......................................................................................................... 1.808 Creative Sources .................................................................................................................... 1.809 Classified Ads .................................................................................................................. 1.809 Environmental Impact Statements .............................................................................. 1.810 Proxies .............................................................................................................................. 1.810 Posing as a Customer ..................................................................................................... 1.810 Building Financial Statements .................................................................................................... 1.811 How Income Statements Are Calculated ........................................................................... 1.812 Revenue Estimates ......................................................................................................... 1.812 Costs of Goods Sold ...................................................................................................... 1.812 Overhead ......................................................................................................................... 1.813 How Balance Sheets Are Calculated................................................................................... 1.813 Nontraditional Sources................................................................................................................ 1.814 A Corporate Spy Uses Open Sources: What of It? ................................................................. 1.815 Favourite Targets ......................................................................................................................... 1.816 Research and Development ................................................................................................. 1.816 Marketing ................................................................................................................................ 1.817 Manufacturing and Production ........................................................................................... 1.817 Human Resources ................................................................................................................. 1.817 How Information Is Lost ........................................................................................................... 1.817 Accident .................................................................................................................................. 1.818 Poor Information Security Procedures .............................................................................. 1.818 On-site Materials That Are Targeted ........................................................................... 1.818 Guarding Manual Systems............................................................................................. 1.820 Guarding Information Stored in Electronic Format................................................. 1.821 Basic Principles of Spying ........................................................................................................... 1.823 2011 Fraud Examiners Manual (International) 1.xi
- 17. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES THEFT OF INTELLECTUAL PROPERTY (CONT.) Recruited Spies ...................................................................................................................... 1.823 False Flag Recruitment .................................................................................................. 1.823 Recruiting by Justification ............................................................................................. 1.824 Trapping Recruits ........................................................................................................... 1.824 Counter-Recruitment Training ............................................................................................ 1.824 After Recruitment ................................................................................................................. 1.825 Targeted Information .................................................................................................... 1.825 Methods for Safely Collecting Data ............................................................................. 1.826 Communications Between the Employee and the Control...................................... 1.826 Security Measures for the Recruit ................................................................................ 1.827 Planting Bugs .................................................................................................................. 1.827 Deception Techniques .......................................................................................................... 1.827 Employment Advertisements ....................................................................................... 1.828 Headhunter Scams.......................................................................................................... 1.828 Market Research Scams ................................................................................................. 1.828 Phoney Contract Bids .................................................................................................... 1.828 Infiltration Techniques ................................................................................................................ 1.829 Posing as an Employee or Contract Labourer .................................................................. 1.829 Stealing Badges ...................................................................................................................... 1.830 Moles and Sleepers ................................................................................................................ 1.831 Places Where Spies Snoop ................................................................................................... 1.831 Mailroom ......................................................................................................................... 1.832 Loading Docks ................................................................................................................ 1.832 Storage Areas................................................................................................................... 1.832 Hotels ............................................................................................................................... 1.833 Warning Signs of Infiltrations ............................................................................................. 1.834 Countermeasures ................................................................................................................... 1.836 Transactional Intelligence ........................................................................................................... 1.837 Informants .............................................................................................................................. 1.837 Decoy Websites ..................................................................................................................... 1.838 Telling Good Lies ........................................................................................................................ 1.839 Visual Surveillance Against People ............................................................................................ 1.840 Pre-Recruitment Surveillance .............................................................................................. 1.840 Briefing Files on the Subject ................................................................................................ 1.841 Moving Surveillance .............................................................................................................. 1.841 Fixed Surveillance.................................................................................................................. 1.842 E-Mail ............................................................................................................................................ 1.842 Social Engineering........................................................................................................................ 1.843 The Neophyte ........................................................................................................................ 1.843 The Power Broker ................................................................................................................. 1.843 The Systems Administrator ................................................................................................. 1.844 Fraudulent Surveys ................................................................................................................ 1.844 1.xii 2011 Fraud Examiners Manual (International)
- 18. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES THEFT OF INTELLECTUAL PROPERTY (CONT.) Fake Prizes ............................................................................................................................. 1.844 Reverse Social Engineering .................................................................................................. 1.844 Countering Social Engineering ............................................................................................ 1.845 Cloaking and Misdirection .......................................................................................................... 1.846 Intelligence Needs ................................................................................................................. 1.846 Print Media ...................................................................................................................... 1.846 Database Searches .......................................................................................................... 1.847 Existing Staffing ............................................................................................................. 1.847 Security Surveys .............................................................................................................. 1.848 Cloaking Operations ............................................................................................................. 1.849 Trash and Waste Disposal ............................................................................................. 1.850 Deliveries and Shipments .............................................................................................. 1.850 Hours of Operation and Power Consumption .......................................................... 1.850 Emissions......................................................................................................................... 1.850 Food Deliveries............................................................................................................... 1.851 Computer Emanations .................................................................................................. 1.851 Travel Plans ..................................................................................................................... 1.851 Misdirection ........................................................................................................................... 1.852 Spotting False Suitors .................................................................................................... 1.852 Vendors and Suppliers ................................................................................................... 1.854 Technical Articles and Publications ............................................................................. 1.854 Consultants ...................................................................................................................... 1.854 Dealing with Employees Who Are Leaving ............................................................... 1.855 Hackers ............................................................................................................................ 1.855 Technical Surveillance ................................................................................................................. 1.856 Aerial Photography ............................................................................................................... 1.858 Bugging and Wiretapping ..................................................................................................... 1.858 The Insertion Point ........................................................................................................ 1.858 The Technology .............................................................................................................. 1.859 Warning Signs of Bugging ............................................................................................. 1.861 Preliminary Search Procedures ..................................................................................... 1.864 Video Surveillance ................................................................................................................. 1.867 Photographic Cameras.......................................................................................................... 1.868 Minicameras .................................................................................................................... 1.868 Digital Cameras ............................................................................................................... 1.868 Infrared Film ................................................................................................................... 1.869 Digital Cameras ............................................................................................................... 1.869 Cellular Telephones............................................................................................................... 1.870 Monitoring Computer Emanations .................................................................................... 1.870 Tape Recorders ...................................................................................................................... 1.871 Computer System Penetrations ........................................................................................... 1.871 Investigating an Information Theft Case ................................................................................. 1.871 2011 Fraud Examiners Manual (International) 1.xiii
- 19. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES THEFT OF INTELLECTUAL PROPERTY (CONT.) Program for Safeguarding Proprietary Information (SPI) ..................................................... 1.873 Task Force .............................................................................................................................. 1.873 Employee Awareness ............................................................................................................ 1.874 Nondisclosure Agreements .................................................................................................. 1.874 Document Classification ...................................................................................................... 1.875 Visitors .................................................................................................................................... 1.875 Offices..................................................................................................................................... 1.875 Maintenance Workers ........................................................................................................... 1.876 Meeting Rooms...................................................................................................................... 1.876 Quiet Rooms .......................................................................................................................... 1.876 Communications Equipment .............................................................................................. 1.876 Electronic Mail and Voice Mail ........................................................................................... 1.876 Computer Systems ................................................................................................................ 1.877 Faxing Documents ................................................................................................................ 1.878 Video Encryption .................................................................................................................. 1.878 Corporate Telephone Exchanges........................................................................................ 1.878 Trade Shows and Public Events ......................................................................................... 1.879 Foreign Travel........................................................................................................................ 1.879 Technical Surveillance Countermeasures (TSCM) Survey ..................................................... 1.879 Preventing Employee Theft of Proprietary Information ....................................................... 1.881 Employee Awareness ............................................................................................................ 1.881 Nondisclosure and Noncompetition Agreements............................................................ 1.882 Make Sure Employees Know When Not to Speak .......................................................... 1.883 Exit Interviews....................................................................................................................... 1.883 Protecting the Trade Secrets of Others .................................................................................... 1.884 FINANCIAL INSTITUTION FRAUD Embezzlement Schemes ............................................................................................................. 1.901 Types of Embezzlement Schemes ...................................................................................... 1.901 False Accounting Entries .............................................................................................. 1.901 Unauthorised Withdrawals ............................................................................................ 1.901 Unauthorised Disbursement of Funds to Outsiders ................................................. 1.901 Paying Personal Expenses from Bank Funds............................................................. 1.902 Theft of Physical Property ............................................................................................ 1.902 Moving Money from Customers’ Dormant or Inactive Accounts ......................... 1.902 Unauthorised, Unrecorded Cash Payments................................................................ 1.902 Theft and Other Unauthorised Use of Collateral ...................................................... 1.902 Detection Methods ............................................................................................................... 1.902 Loan Fraud .................................................................................................................................... 1.903 Financial Institution Failures as a Result of Real Estate Loan Fraud ............................ 1.903 Common Loan Fraud Schemes .......................................................................................... 1.903 1.xiv 2011 Fraud Examiners Manual (International)
- 20. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES FINANCIAL INSTITUTION FRAUD (CONT.) Loans to Nonexistent Borrowers ................................................................................. 1.903 Sham Loans with Kickbacks and Diversion ............................................................... 1.903 Double-Pledging Collateral ........................................................................................... 1.904 Reciprocal Loan Arrangements .................................................................................... 1.904 Swapping Bad Loans—Daisy Chains .......................................................................... 1.904 Linked Financing ............................................................................................................ 1.904 False Applications with False Credit Information ..................................................... 1.904 Single-Family Housing Loan Fraud ............................................................................. 1.904 Construction Loans ........................................................................................................ 1.904 Red Flags of Loan Fraud...................................................................................................... 1.908 Nonperforming Loans ................................................................................................... 1.908 High Turnover in Developer’s Personnel ................................................................... 1.909 High Turnover in Tenant Mix ...................................................................................... 1.909 Increased Change Orders .............................................................................................. 1.909 Missing Documentation ................................................................................................ 1.909 Loan Increases or Extensions, Replacement Loans .................................................. 1.911 Funds Transformation ................................................................................................... 1.912 Cash Flow Deficiencies ................................................................................................. 1.912 Change in Ownership Makeup ..................................................................................... 1.912 Disguised Transactions......................................................................................................... 1.912 Real Estate Fraud ......................................................................................................................... 1.913 Appraisal Fraud ..................................................................................................................... 1.914 The Role of the Appraiser............................................................................................. 1.914 Fundamentals of Real Estate Appraisals ..................................................................... 1.914 Determining “Value” ..................................................................................................... 1.914 Valuation Methods ......................................................................................................... 1.915 Fraudulent Appraisals .................................................................................................... 1.916 Uses for Fraudulent Appraisals .................................................................................... 1.916 Red Flags of “Made-as-Instructed” Appraisals .......................................................... 1.917 Detecting Fraudulent Appraisals .................................................................................. 1.917 Equity Skimming ................................................................................................................... 1.918 Property Flipping .................................................................................................................. 1.918 Nominee or Strawman Loans.............................................................................................. 1.919 Mortgage Pulling ................................................................................................................... 1.919 New Account Fraud Schemes .................................................................................................... 1.919 False Identification ................................................................................................................ 1.919 Business Accounts Using Stolen Cheques ......................................................................... 1.919 Personal Accounts Using Fraudulent Cheques................................................................. 1.920 Prevention .............................................................................................................................. 1.920 Personal Accounts .......................................................................................................... 1.920 Business Accounts .......................................................................................................... 1.921 Detection ................................................................................................................................ 1.922 2011 Fraud Examiners Manual (International) 1.xv
- 21. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES FINANCIAL INSTITUTION FRAUD (CONT.) Money Transfer (Wire) Fraud Schemes .................................................................................... 1.922 Instantaneous Transfer ......................................................................................................... 1.922 Common Schemes ................................................................................................................ 1.923 Dishonest Bank Employees .......................................................................................... 1.923 Misrepresentation of Identity ....................................................................................... 1.923 System Password Security Compromised ................................................................... 1.923 Forged Authorisations ................................................................................................... 1.923 Unauthorised Entry and Interception ......................................................................... 1.923 Preventing and Detecting Wire Transfer Fraud ............................................................... 1.923 Business Audits and Other Controls ........................................................................... 1.923 Bank Audits ..................................................................................................................... 1.924 Automated Teller Machine (ATM) Fraud ................................................................................ 1.925 Detection ................................................................................................................................ 1.926 Advanced Fee Fraud .................................................................................................................... 1.926 Red Flags ................................................................................................................................ 1.926 Brokered Loans ..................................................................................................................... 1.927 Letter-of-Credit Fraud ................................................................................................................. 1.927 Inside/Outside Frauds ................................................................................................................ 1.927 Account Information Frauds............................................................................................... 1.928 Trading Activities .................................................................................................................. 1.928 Prevention ..................................................................................................................................... 1.928 Loan Origination, Underwriting, Closing, Disbursement, and Servicing Segregation......................................................................................................... 1.928 Committee Approval of All Large or Unusual Transactions.......................................... 1.928 Transfer Journal Entries and Orders Review .................................................................... 1.929 Independent Review of Loans ............................................................................................ 1.929 Management Review of Write-Offs ................................................................................... 1.929 Routine Examination of Officers’ Accounts .................................................................... 1.929 Proper Lending Policies ....................................................................................................... 1.929 Document Requirements for Standard Transactions ...................................................... 1.929 Information Verification (For Example, Loan Applications)......................................... 1.930 Employee Training ................................................................................................................ 1.930 Standardised Procedures ...................................................................................................... 1.930 The Basel Committee on Banking Supervision ....................................................................... 1.931 The Basel Core Principles for Effective Banking Supervision ....................................... 1.932 The International Convergence of Capital Measurement and Capital Standards ........ 1.938 Capital Requirements ............................................................................................................ 1.938 The Basel II Framework ...................................................................................................... 1.939 Sound Practices for the Management and Supervision of Operational Risk ............... 1.941 Background ..................................................................................................................... 1.942 Industry Trends and Practices ...................................................................................... 1.943 Sound Practices ............................................................................................................... 1.944 1.xvi 2011 Fraud Examiners Manual (International)
- 22. FINANCIAL TRANSACTIONS AND FRAUD SCHEMES CHEQUE AND CREDIT CARD FRAUD Cheque Fraud ............................................................................................................................... 1.1001 Counterfeiting Cheques ........................................................................................................ 1.1001 Signs of Counterfeit and Forged Cheques .................................................................. 1.1002 Cheque Fraud Vulnerabilities .............................................................................................. 1.1002 Cheque Theft ......................................................................................................................... 1.1002 Cheque Fraud Schemes ........................................................................................................ 1.1003 Paperhangers ................................................................................................................... 1.1003 Stop Payment Orders..................................................................................................... 1.1003 Cheque Kiting ................................................................................................................. 1.1004 Demand Drafts ............................................................................................................... 1.1004 Third-Party Bill Paying Services ................................................................................... 1.1004 Travellers’ Cheques ........................................................................................................ 1.1005 Payroll Cheque Fraud .................................................................................................... 1.1005 Dumpster Diving............................................................................................................ 1.1006 Scanning ........................................................................................................................... 1.1006 System Password Security Compromised ................................................................... 1.1006 Cheque Fraud Rings .................................................................................................................... 1.1006 Cheque Fraud Detection ............................................................................................................. 1.1007 FBI Profile of Cheque Fraud Activity ................................................................................ 1.1007 Detection Techniques ........................................................................................................... 1.1008 Cheque Fraud Prevention and Investigation ........................................................................... 1.1009 Cheque Fraud Investigations ............................................................................................... 1.1010 Cheque Fraud Prevention Tools ......................................................................................... 1.1011 Check Writing Pens ........................................................................................................ 1.1011 Fingerprint Identifiers .................................................................................................... 1.1012 Forensic Document Examination ................................................................................ 1.1012 Signature .......................................................................................................................... 1.1012 Handwriting..................................................................................................................... 1.1013 Video Spectral Comparator .......................................................................................... 1.1013 Electrostatic Detection Apparatus ............................................................................... 1.1013 Credit Card Fraud ........................................................................................................................ 1.1013 Credit Card Schemes............................................................................................................. 1.1013 Unauthorised Use of a Lost or Stolen Card ............................................................... 1.1013 Organised Crime Rings.................................................................................................. 1.1014 Advance Payments ......................................................................................................... 1.1014 Stolen Card Numbers .................................................................................................... 1.1014 Shave and Paste .............................................................................................................. 1.1015 De-Emboss/Re-Emboss ............................................................................................... 1.1015 Counterfeit Cards ........................................................................................................... 1.1015 Telephone/Mail Order Fraud....................................................................................... 1.1016 Mail Theft ........................................................................................................................ 1.1016 2011 Fraud Examiners Manual (International) 1.xvii