Organizations of all kinds and sizes are increasingly threatened by fraud. Embezzlement, kickbacks, check fraud, financial statement fraud and vendor billing schemes are just a few of the countless economic crimes committed by employees and outsiders.

This seminar will provide auditors and other financial professionals with a strong foundation of practical knowledge about how common frauds are committed using a combination of lecture, exercises and group breakout sessions

Course Objective:

What You Will Learn -

• Common and uncommon internal and external fraud schemes threatening organizations today
• Who commits internal and external (and collusive) fraud
• Why employees commit fraud
• How to detect the red flags of common schemes
• Essential fraud detection tools and techniques
• Software tools for auditing for fraud
• Best practices for developing and implementing anti-fraud controls

Learning Objectives:

• Understand the fraud problem
• Identify the red flags of fraud
• How to detect and investigate fraud
• Building an anti-fraud control environment

Course Outline:

SECTION ONE: THE FRAUD PROBLEM

Part 1: Introduction

• External versus Internal Fraud—short overview information security theft and fraud
• Who commits fraud -- The Fraud Triangle (Graphic scenario of presence of all three components)
• Lessons from Fraudsters: (Examples of real-life frauds that can and do affect large not-for-profits (NFP)

 Part 2: Common Types of External and Internal Fraud Today

External Fraud:

• Vendor fraud  (Case studies that show new ways vendor fraud can be committed)
• Check fraud  (illustrations of forged/altered checks)
• The growing threat of cyber-crime (hacking/information theft, system sabotage, viruses, etc)
• Social engineering (Phishing, pretexting, smishing, spear phishing)

Internal Fraud:

• Embezzlement (General definition; 2-3 case studies)
• Cash theft (Skimming, lapping)
• T&E fraud/Misuse of company credit card or P-card
• Collusion w/ domestic or international vendors (kickbacks, bribery)
• Identity theft vs identity fraud (pretexting, using co-worker’s credentials to commit fraud, theft of customer ID)
• Theft/falsification of confidential information (donor personal information, employee data, etc)
• Theft of assets (laptops, physical equipment, software piracy)
• Payroll Fraud (Manipulating payroll systems; ghost employees)
•  Procure-to-Pay fraud (Procurement — Receiving—Accounts Payable Cycle)
• Overview of  internal Internet/cyber-fraud

SECTION 2: THE ALL-IMPORTANT RED FLAGS OF FRAUD

Part 3:  Conducting a Fraud Risk Assessment and Recognizing the Red Flags of Internal Fraud

• Intro to the Fraud Risk Mitigation Cycle—Implementing a Company-Wide System for Detecting, Preventing and Investigating Fraud
• Steps to Conducting a Successful Fraud Risk Assessment
• Embezzlement red flags (Behavioral changes, accounting anomalies)
• Cash theft red flags (anomalies in daily reconciliations, check-for-cash indicators, etc)
• T&E fraud red flags (Unusually high expense claims; photocopies of receipts, etc) Frequent  switches in vendors; vendor address is a P.O. box)
• Collusion/kickback/bribery red flags (long-time vendor suddenly replaced, pricing anomalies, etc)
• Identity fraud red flags (internal) (Employees complain of ID theft problems, customer complaints)
• Theft of confidential information (Example: Scientific fraud/fraudulent scientific research)
• Theft of assets/industrial equipment (laptops, software piracy, construction materials, equipment, gasoline, confidential/proprietary information)
• Payroll fraud (terminated employees still receiving checks; payroll amounts fluctuate)
• P2P fraud red flags (Suddenly higher costs of supplies or  services; low quality of delivered merchandise)
• Financial reporting fraud  (Unusually high revenues, odd patterns in receivables, etc)
• Counterfeiting and piracy  (Graphic samples of red flags)
• Internet/cyber-fraud

SECTION 3: FRAUD DETECTION

Part 4: Fraud Detection

Red Flags are the Key to Fraud Detection and Prevention. Once you know what red flags to look for you can implement effective detection, investigative and forensic accounting techniques.
Introduction: How Frauds Are Most Often Detected (General ways: ACFE Chart)

Fraud Risk Mitigation Cycle- Part 5

Additional General Detection Methods:

• Whistleblower hotlines: How to set them up and manage them (detailed discussion of do’s and don’ts). Detailed instruction on best practices and mistakes to avoid
• Other important fraud detection procedures:
• Monitor Employee Email, other activities
• Surprise Internal Audit
• Regular internal audits, incorporating fraud audit testing
• Ratio analysis
• Physical inspection of inventory
• Manual review of all vendors (to ensure absence of sham vendors)
• Manual review/assessment of payroll sample data (to ensure absence of ghosts)
• Data Analytics (is both detective and investigative. IA can use D-A to screen for red flags) Instruction on basic steps and techniques and how to gather required data.

SECTION 4: ANTI-FRAUD CONTROLS

Part 6: Internal Controls and Other Fraud Prevention Measures:

• Who Should Manage Anti Fraud Activities
• Internal Controls: Do’s and Don’t’s
• Best Practices in Anti-Fraud Controls.

-General controls: Segregation of Duties, Delegation of Authority, Background investigation

-Specific operations-level controls for each fraud category. (Josh: I have lists of anti-fraud controls for each of the main types of fraud. You might wish to print these out as handouts, as they can not ALL be discussed in a training venue)

What You Get:

• Training Materials
• Live Q&A Session with our Expert
• Participation Certificate
• Access to Signup Community (Optional)
• Reward Points

Who Will Benefit:

• Internal and External Audit Professionals
• Accounting and Audit Practitioners
• AP Managers
• Senior Financial Management seeking to reduce their vulnerability to Costly Frauds
• Procurement and Payables Specialists
• Compliance and Ethics Managers
• CFO's/Senior Financial Managers
• Security Personnel