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Fraud Prevention and Detection: Warning Signs and the Red Flag System [Kietas viršelis]

3.50/5 (4 ratings by Goodreads)
(Nepean, Ontario, Canada), (Port Sydney, Ontario, Canada), (Toronto, Ontario, Canada)
  • Formatas: Hardback, 316 pages, aukštis x plotis: 234x156 mm, weight: 586 g, 8 Tables, black and white; 12 Illustrations, black and white
  • Išleidimo metai: 12-Mar-2014
  • Leidėjas: Routledge
  • ISBN-10: 1466554541
  • ISBN-13: 9781466554542
Kitos knygos pagal šią temą:
Fraud Prevention and Detection: Warning Signs and the Red Flag SystemDidesnis paveikslėlis
  • Formatas: Hardback, 316 pages, aukštis x plotis: 234x156 mm, weight: 586 g, 8 Tables, black and white; 12 Illustrations, black and white
  • Išleidimo metai: 12-Mar-2014
  • Leidėjas: Routledge
  • ISBN-10: 1466554541
  • ISBN-13: 9781466554542
Kitos knygos pagal šią temą:
Pastovi nuoroda: https://www.kriso.lt/db/9781466554542.html
Raktažodžiai:
Lessons can be learned from major fraud cases. Whether the victim is a company, public agency, nonprofit, foundation, or charity, there is a high likelihood that many of these frauds could have been prevented or detected sooner if early Red Flag warning signs had been identified and acted upon. Fraud Prevention and Detection: Warning Signs and the Red Flag System will enable officers and directors, internal and external stakeholders, as well as outside analysts to protect themselves and their organizations against fraud by effectively detecting, analyzing, and acting on early Red Flag warning signs. Based on an empirically tested strategy, the Red Flag System reflects the authors more than 100 years combined experience in the investigation of fraud in high-profile, global cases in North America, Africa, Europe, and the Far East.

Readers of this book will:





Acquire a general awareness of the nature, characteristics, and dynamics of fraud Understand the process for determining whether a fraud has been committed Develop an understanding of enterprise risk management approaches for fraud risk management, compliance risk management, and managing the risk of fraudulent financial reportingincluding an understanding of the limitations inherent in these approaches Learn how to find Red Flag indicators of fraud or suspicious transactions in financial statements, budgets, and contracts Know how to ensure that, once a Red Flag has been identified, appropriate action is taken

Fraud can lead to significant financial loss as well as bad press and publicity with significant reputational impact for officers, directors, corporations, and their stakeholders. This books no-nonsense approach empowers those charged with protecting organizations to stop these frauds before the organizations livelihood is jeopardized or to mitigate damage when fraud has occurred.

Recenzijos

"Fraud mitigation, timely detection, and thorough investigation are crucial elements for asset and brand protection. This book seeks to provide a foundation to recognize fraud during its incipient stages and identify actions to stop it. The authors have collectively leveraged their extensive international investigative experience into an exceptional resourceAny corporate leader or investigator should strongly consider adding this book to their library." ASIS Dynamics, March/April 2015

Foreword xiii
Bob Lindquist
The Authors xv
1 An Introduction to the Red Flag System
1(14)
A Persistent Threat
1(3)
The Red Flags of Fraud
4(3)
Defense in Depth
7(2)
Can You Rely on Regulators or Law Enforcement?
9(3)
About This Book
12(3)
2 Fraud 101: A Primer
15(6)
Introduction
15(1)
What Is Fraud?
15(1)
The Elements of Fraud
16(1)
Criminal Fraud and Civil Fraud
17(1)
What Is Criminal Fraud?
17(1)
What Is Civil Fraud?
18(1)
Conspiracy
19(1)
Conclusion
20(1)
3 The Dynamics and Root Causes of Fraud
21(8)
Introduction
21(1)
Who Commits Fraud?
21(1)
The Fraud Triangle and the Fraud Diamond
22(1)
The Fraud Triangle
22(1)
The Fraud Diamond
23(1)
The Underlying Dynamics of Fraud
23(1)
The Fraudster's Motivation
24(1)
The Fraudster's Rationalization
25(1)
Environmental Indicators
25(2)
Conclusion
27(2)
4 The Red Flag System
29(8)
Introduction
29(1)
What Is a Red Flag?
29(3)
The Red Flags of Fraud
32(1)
The Four Phases of the Red Flag System
33(1)
Phase 1---Screening for Red Flags
33(1)
Phase 2---Scrutinizing for Red Flags
34(1)
Phase 3---In-Depth Examination
34(1)
Phase 4---Formal Reporting/Referral
35(1)
Conclusion
35(2)
5 Financial Statement Fraud
37(16)
Introduction
37(1)
What Is Financial Statement Fraud?
37(1)
Scope and Extent of Financial Statement Fraud
38(2)
What Are Financial Statements?
40(1)
What Are the Most Frequent Types of Financial Reporting Fraud?
41(1)
What Is the Motivation for Financial Reporting Fraud?
42(1)
How Is Financial Reporting Fraud Usually Perpetrated?
42(1)
Introduction
42(1)
How Are Net Assets Typically Manipulated?
43(1)
How Are Fixed Assets Typically Manipulated?
43(3)
How Is Inventory Typically Manipulated?
46(1)
How Are Accounts Receivable Typically Manipulated?
47(1)
How Is Cash in the Bank”r; Typically Manipulated?
47(1)
How Are Liabilities and Accrued Liabilities Typically Manipulated?
48(1)
How Are Sales Typically Manipulated?
49(1)
How Are Expenses Typically Manipulated?
50(1)
How Are Notes to Financial Statements Typically Manipulated?
50(1)
How Are Management Discussion and Analysis Reports Typically Manipulated?
50(1)
Conclusion
51(2)
6 Red Flags for Financial Statement Fraud
53(10)
Introduction
53(1)
Types of Financial Statement Fraud Red Flags
53(1)
Behavioral Red Flags
54(1)
Situational Red Flags
54(1)
Organizational Red Flags
55(1)
Financial Red Flags
56(1)
Transactional Red Flags
56(1)
Empirical Evidence: Red Flags in Financial Statement Fraud Cases
57(1)
Prevention versus Detection
58(1)
Preventing Financial Statement Fraud
58(2)
Reduce the Situational Pressures That Encourage Statement Fraud
60(1)
Reduce the Opportunity to Commit Financial Statement Fraud
61(1)
Reduce Rationalization of Fraud---Strengthen Employee Personal Integrity
61(1)
Conclusion
62(1)
7 Procurement Fraud
63(8)
Introduction
63(1)
Overview of Procurement Fraud
63(1)
Types of Contracts
64(1)
Competitive and Noncompetitive Contracts
65(1)
Methods for Pricing Procurement Contracts
66(1)
Procurement Methods
66(1)
Stages of Procurement Contracts
67(1)
Requirements Definition Stage
67(1)
Key Control Features for the Requirements Definition Stage
68(1)
Bidding and/or Selection Stage
68(1)
Key Control Features in the Bidding and/or Selection Stage
69(1)
Contract Performance and Evaluation Stage
69(1)
Key Control Features in the Performance and Evaluation Stage
70(1)
Conclusion
70(1)
8 Procurement Fraud Methods and Red Flags
71(18)
Introduction
71(1)
Procurement Fraud and Its Red Flags
71(1)
Procurement Manipulation Schemes
72(1)
Collusive Bidding or Bid Rigging
72(1)
Red Flags of Collusive Bidding or Bid Rigging
73(1)
Red Flags Indicating Corruption and Bribery in the Collusive Bidding Process
74(5)
Contract Splitting
79(1)
Contract Bundling
80(1)
Red Flags That Identify Billing Schemes Suggesting Corruption, Fraud, and Theft in the Procurement Process
81(2)
False Representations
83(1)
Front-End Loading or Advance Payment Fraud
84(1)
Information Theft
84(1)
Local Purchase Order or Split Purchases
85(1)
Phantom Contractor
85(1)
Product Substitution
86(1)
Progress Payment Fraud
86(1)
Purchases for Personal Use
86(1)
Time Limitations and Restricted Advertising
86(1)
Unnecessary Purchases
87(1)
Conclusion
88(1)
9 Bribery and Corruption
89(28)
Introduction
89(1)
Economic Impact of Bribery
90(1)
Negative Impact of Corruption at the Global Level
90(1)
Negative Impact of Corruption---Internal
91(1)
Bribery of Public Officials
92(2)
Components of Antibribery Laws
94(1)
Bribery as a Criminal Offense
94(1)
Corporate Criminal Liability versus Individual Criminal Liability
95(1)
Legal Entity View versus Conglomerate View
96(1)
Criminalization of Facilitation Payments
96(1)
Application of Antibribery Laws
96(1)
Definition of a Public Official
97(1)
Extent of Monetary Penalties
97(2)
Money Laundering to Conceal Corrupt Payments
99(1)
Secret Commissions or Bribes to Nonpublic Officials
100(2)
Secret Commissions as a Criminal Offense
102(2)
Schemes Used to Pay Unlawful Benefits
104(2)
Bribes Paid with Funds under Direct Control of the Corporation---Using Secret Off-Book Funds
106(2)
Using Lawyers to Channel Corrupt Payments to Public Officials or Private-Sector Decision Makers
108(4)
Arrangements with Foreign Agents and Consultants
112(1)
Using Local Importers in Foreign Jurisdictions
113(1)
Bribes Paid with Funds under the Control of Intermediaries
114(1)
Using Foreign Subcontractors or Joint Venture Partners to Pay the Bribe
114(1)
Directors' Obligations
115(1)
Conclusion
116(1)
10 Fraud and Money Laundering
117(10)
Introduction
117(1)
The Koop Fraud
117(1)
Development of Money Laundering Laws
118(3)
What Is Money Laundering?
121(2)
Fraud and Money Laundering
123(1)
Creating and Operating Undisclosed or Offshore Corporations
124(1)
Creating and Operating Undisclosed or Offshore Trusts
124(1)
Creating and Operating Undisclosed or Offshore Bank Accounts
124(1)
Undisclosed Insider Beneficial Relationships
125(1)
Creating Fictitious Records to Enhance this Offshore Activity
125(1)
Conclusion
125(2)
11 High-Risk Corporate Activities and Market Manipulation
127(8)
Introduction
127(1)
High Risk with Start-Up Corporations
127(1)
Market Manipulation
128(5)
Market Manipulation and Start-Up Corporations---Red Flags
133(1)
Conclusion
134(1)
12 Pyramid Schemes
135(10)
Introduction
135(1)
Charles Ponzi
136(2)
Bernard L. Madoff
138(1)
Holiday Magic
139(1)
Kubus
140(1)
The Bennett Funding Group
141(1)
Why Pyramid Schemes Are a Concern
141(1)
Red Flags---Pyramid Schemes
142(3)
13 Fraud and the Absence of Good Governance
145(8)
Introduction
145(1)
Governance and Good Governance
146(1)
Duties and Responsibilities of a Board of Directors
146(2)
Good Governance and Tone at the Top
148(3)
Structure and Reliable Decision-Making Processes
151(1)
Accountability and Transparency
151(1)
Conclusion
151(2)
14 The Board of Directors and Its Responsibility to Safeguard the Organization
153(24)
Introduction
153(1)
Governance Structures
153(1)
Directors' Duties and Responsibilities
154(2)
Common Law and Civil Law Systems
156(2)
Corporate Law---United States
158(1)
Corporate Law---Canada
159(2)
Corporate Law---European Union
161(1)
Duty of Care, Diligence, and Skill
161(1)
Roles and Responsibilities in Practice
162(1)
Due Diligence in Oversight Role
163(2)
Internal Control over Financial Reporting
165(2)
Fraud and Compliance Controls
167(1)
High-Risk Procurement and Sales Contracts
168(1)
Budgets
169(2)
Fraud Diagnostic Tools
171(4)
Conclusion
175(2)
15 Enterprise Risk Management, Fraud Risk Management, and Compliance Risk Management
177(48)
Introduction
177(1)
Enterprise Risk Management
177(2)
What Is ERM?
179(1)
The Width Dimension of ERM
179(1)
The Height Dimension of ERM
180(15)
The Depth Dimension of ERM
195(1)
Fraud Risk Management
195(2)
Internal Environment
197(1)
Objective Setting
198(1)
Event Identification
199(1)
Fraud Risk Assessment
200(3)
Fraud Risk Response
203(1)
Fraud Risk Control Activities
203(1)
Prevention
203(2)
Detection
205(3)
Response
208(1)
Information and Communication
209(1)
Monitoring
210(1)
Compliance Risk Management
211(1)
Internal Environment
211(1)
Objective Setting
211(2)
Event Identification
213(1)
Risk Assessment
214(3)
Risk Response
217(1)
Control Activities
218(1)
Prevention
218(1)
Detection and Response
219(1)
Information and Communication
219(1)
Monitoring
220(1)
Reality Check---Coso ERM Implementation
221(1)
Status of ERM Implementation
221(1)
Risk Appetite and Residual Risk
222(1)
Inadequate Design of the Risk Management Process
222(1)
Conclusion
223(2)
16 The Board of Directors---First Line of Defense against Fraud and Corruption
225(12)
Introduction
225(1)
Red Flags and Directors' Responsibilities
225(5)
Lessons from Enron and WorldCom
230(5)
Conclusion
235(2)
17 Screening, Scrutinizing, and Investigating Red Flags
237(12)
Introduction
237(1)
When to Screen for Red Flags
237(2)
Screening for Red Flags---The Budget
239(1)
Screening for Red Flags---Financial Reports and Project Reports
239(1)
How to Ask Questions in the Right Manner
240(4)
Prudent Strategy
244(1)
Screening Complaints for Red Flags
245(1)
Scrutinizing Red Flags
245(1)
Role of Internal Auditors
246(1)
Incentives to Investigate Properly
247(2)
Conclusion 249(4)
Appendix A Summary of Red Flags 253(12)
Appendix B Glossary 265(20)
Index 285
Rodney T. Stamler is a former assistant commissioner of the Royal Canadian Mounted Police (RCMP). His major cases included chasing the hidden assets of the late Romanian dictator Nicolae Ceausescu in the early 1990s; investigating the $1 billion Bre-X mining scandal in Indonesia, the worlds largest gold mining fraud; and investigating a massive, multinational procurement fraud at a Fortune 100 multibillion-dollar corporation. He served as a special advisor to the United Nations in the development of the international convention against laundering the proceeds of illicit drug trafficking. He is often called to provide advice and counsel on corporate governance matters.

Hans J. Marschdorf is a leading international forensic accountant who has conducted financial investigations for the past 23 years around the world, ranging from multinational corruption and procurement fraud investigations to money laundering investigations, investigations of elaborate Ponzi schemes, and frauds involving structured financial products. His experience includes a position as pan-European leader of a forensic services practice in a Big 4 professional services firm. He now practices as a financial crime investigator from Greater Toronto, Ontario.

Mario Possamai is a senior fraud professional at a major Canadian financial institution and has managed complex fraud, asset recovery, and corruption investigations in North America, Europe, and Africa for more than two decades. A member of the Bre-X investigative team in Indonesia, he also provided forensic financial consulting services to the director of public prosecutions in a southern African country in the mid-1990s; was an expert witness for the Department of Justice in Canada on money laundering; and was senior advisor to Superior Court Justice Archie Campbell, who headed the judicial inquiry into the SARS outbreak in 2003.