Term
| What are the 5 types of non-cash misappropriation schemes? |
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Definition
Misuse
Unconcealed Larceny
Asset requisitions and transfers
Purchasing and receiving schemes
Fraudulent shipmments |
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Term
According to the the National Fraud Survey
how to Noncash misappropriation schemes
conpare to cash misappropriation schemes |
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Definition
As the data from the 2006 National Fraud Survey shows, noncash schems are less common than cash schemes, but the median loss in noncash schemes are slightly higher.
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Term
There are basically two ways a person can misappropriate a company asset.
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Definition
| The asset can be misused (or borrowed) or it can be stolen. |
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Term
What are some of the ways to prevent and detect larceny of Noncash Assets? |
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Definition
| Dividing of duties requisitioning, purchasing, and receiving, these assets should be segregated. Payables functions should be segregated from all purchasing and receiving duties. All merchandise should be physically guarded and locked, with access restricted to authorized personnel only. Access logs, personalized entry codes, Installations of security cameras, their presence should be made known to employees, security guards |
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Term
| What is a Unconceale Larceny Schemes? |
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Definition
| Unconcealed Larceny Scheme is when the fraudster simply takes property from the company premises without attempting to conceal it in the books and records. The fraudster take the company assets without trying to "justify" their absence. |
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Term
Which employee's are the ones who committ unconcealed larceny schemes? |
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Definition
| Ironically, employees who steal company property are often highly trusted within their organizations. This trust can provide employees with access to restricted areas safes, supply rooms, or even keys to the business. |
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Term
| What are Purchasing and Receiving Schemes? **Important Details** |
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Definition
| It might at first seem that any purchasing scheme should fall under the heading of false billings. There is, however, a distinction between the purchasing schemes that are classified as false billings and those that are classified as noncash misappropriations. If an employee causes his company to purchase merchandise that the comany does not need, this is a false billing scheme. The harm to the company comes in paying for assets for which it has no use. On the other hand, if the asset were intentionally purchased by the company but simply misappropriated by the frauster, this is classified as a noncash scheme. The company is deprived not only of the cash it paid, but also the asset itself. |
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Term
| What happens in a Falsifying Incoming Shipments? |
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Definition
| One of the most common ways for employees to abuse the purchasing and receiving functions is for a person charged with receiving goods on behalf of the victim company marking the shipment as short. |
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Term
| What is the problem with Falsifying Incoming Shipment Schemes? |
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Definition
| The problem comes in when the paper work must be changed to match the missing merchanise. The vendor wants their payment. |
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Term
| Chapter Case Study Swainler's missing hard drives. What was the fraud. |
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Definition
| $600,000 worth of hard drives were missing from the warehouse. In order to collect the insurance money the policy stated it wouldn't cover theft committed by a Swainler employees. The management did not know how the hard drives had been taken from the warehouse. Management deceised to makeup a story so the company could collect the insurance money for the lost hard drives. |
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Term
| Swainler's Insurance company hired an independent adjuster to investgate the case. |
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Definition
| He found that the hard drives were packaged in heavy plastic before shipping, and it was impossible to tell which batch was being shipped because the heavy plastic on the hard drives. The hard drives would also would have been in the shipping dock on the date of the theft. Swainler claimed their competition had come in the taken the hard drives. |
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Term
| How did Doug Anderson and Harry D'Arcy solve the fraud of the missing Hard drives from Swainler Technology? |
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Definition
| A tip came that Swainler was not a good employer. Often working their employees long hours with little pay or benefits. A classic case of emploee resentment, a common excuse for fraud.They notified the manufacurer's representatives throughout Canada and the United States to be on the lookout for a set of serial numbers. |
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Term
| 2nd card on how the Fraud with the Swainler's Technology missing Hard Drives was solved. |
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Definition
| The search of serial numbers lead to a warehouse in Ottawa. At the warehouse some of the documents matching the serial numbers & one of the hard drives turned up. Calls to the warehouse were matched with calls from the Marketing manager at Swainler; Frederic Boucher. |
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Term
| What happened to the Fraudster in the Swainter Technology missing Hard drives? |
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Definition
| The marketing manager, Frederic Boucher confessed. He had sent the hard drives to Ottawa, the bookkeeping system wasn't controlled, the operation was run on trust. |
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Term
| What happened to Frederic Boucher the marketing manager in the Swainler's Technology missing Hard Drives Case. |
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Definition
| Frederic Boucher was sentenced to make restituion for the theft and 2 years in prison. The shipping clerks wer also senenced to prison, but their sentences were suspended. Swainler Technology was sold to an Investment Group. |
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Term
| What is False Shipments of Inventory and Other Assets Scheme? |
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Definition
| To conceal thefts of inventory, fraudster smetimes create false shipping documents and false sales documents to make it appear that missing inventory was not actually stolen bu was instead sold. The "sales" reflected in the packing slips are typically made to a fictitious person, a fictitious company, or an accomplice of the perpetrator. |
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Term
| What is the result of a False shipment of Inventory and Other Assets Scheme? |
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Definition
| A fake receibable account goes into te books for he price of the misappropriated inventory |
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Term
| How do fraudster deal with these fake receivables? |
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Definition
| Some cases the receivable is aged on the company's books until it is eventually written off, or the fraudster has access to the A/R and takes steps to remove the sale, and balance the accounts. **Some times the employee understate legitimate sales so that an accomplice is billed for less than delivered. |
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Term
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Definition
| Insurance Fraud is a very frequent fraud costing billions of dollars. |
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