Fraud in Accounts Payable E-Book

Mary S. Schaeffer

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Veröffentlichungsjahr: 2008

Beschreibung

Praise for Fraud in Accounts Payable

"Fraud in Accounts Payable is an insightful book that takes an in-depth look at the three most frequently committed fraudulent cash disbursement schemes directly related to your accounts payable function. Mary provides colorful and poignant stories showing how easy it can be to steal from both within and outside an organization. But the real beauty of this book is that Mary illustrates ways you can immediately begin implementing effective and efficient controls to reduce the opportunities for fraud within your organization."
—Matthew D. Storlie, CFE, Fraud & Forensic Services Virchow, Krause & Company, LLP

"Mary has delivered another book full of specific suggestions for improving accounts payable processes. Fraud in Accounts Payable is an easy-to-read guide that identifies real-world problems and offers practical solutions. Her books and articles have quickly become some of my core resources."
—Stephanie K. O'Cain, Chief Financial Officer Municipal Association of South Carolina

"Fraud could never take place in my accounts payable department."

"My employees would never steal from me! I trust them too much . . ."

Sound familiar?

The definitive resource for every accounts payable department, Fraud in Accounts Payable affords you a bird's-eye view of what's really going on in your accounts payable department and how you can defend it against every potential type of fraud, including check fraud, payroll fraud, and T&E fraud.

Written by Mary Schaeffer, America's most accomplished accounts payable expert, this thorough and highly readable guide is filled with authoritative tips, techniques, and advice on:

• Uncovering hidden pockets of weakness where your organization is vulnerable

• Getting rid of those bad practices that allow all sorts of frauds to flourish

• Setting up antifraud safeguards

Reminding us to "never say never," Fraud in Accounts Payable explains in plain English how to protect your accounts payable department so it becomes—and stays—financially healthy.

Leseprobe

Table of Contents

Title Page

Copyright Page

Books by Mary S. Schaeffer:

Dedication

PREFACE

Acknowledgements

PART ONE - WHERE ACCOUNTS PAYABLE FRAUD CAN HAPPEN IN YOUR ORGANIZATION

Chapter 1 - PROFILES OF FRAUD IN THE BUSINESS WORLD

THREE BIG MYTHS

FRAUD STATISTICS

OCCUPATIONAL FRAUD: IT’S A BIG PROBLEM

DEFINITIONS AND FREQUENCY

WHO GETS HIT THE HARDEST?

HOW FRAUD IS DETECTED

WHO COMMITS OCCUPATIONAL FRAUD?

TO PROSECUTE OR NOT

IS FRAUD AN EQUAL OPPORTUNITY CRIME?

FRAUD IN THE EYES OF THE BEHOLDER

EFFECT OF STATUS OF FRAUDSTER

BIG BOSS ISSUE

WHY DO INSIDERS STEAL?

CONDITIONS THAT PERMIT FRAUDS TO OCCUR

WHY AREN’T MORE FRAUDSTERS PROSECUTED?

FRAUD IN THE REAL WORLD

CONCLUDING THOUGHTS

Chapter 2 - CHECK FRAUD: STILL A HUGE PROBLEM

INTERNAL CONTROLS TO PREVENT CHECK FRAUD BY INSIDERS

RECOMMENDED CONTROLS

WHAT ELSE CAN YOU DO?

HOW BAD IS THE CHECK FRAUD PROBLEM?

WHAT DOES THE LAW SAY?

IMPACT ON ACCOUNTS PAYABLE

WHAT SHOULD YOU DO?

POSITIVE PAY AND ITS COUSINS

INTERNAL CONTROLS, SEGREGATION OF DUTIES, AND POSITIVE PAY EXCEPTIONS

INTERNAL CONTROLS AND PAPER CHECKS

WHAT CAN GO WRONG

CONSEQUENCES OF POOR INTERNAL CHECK PRODUCTION PROCESSES

THE RIGHT WAY

THE BEST WAY

QUESTIONS THAT REVEAL YOUR INTERNAL CHECK CONTROLS

BEST CHECK-HANDLING PRACTICES BETWEEN PRINTING AND MAILING

MAILING CHECKS

FROM PRINTING TO MAILING: DO YOU KNOW WHERE YOUR CHECKS ARE?

WIRE TRANSFERS

REBATE AND REFUND CHECKS

RUSH CHECKS

WHY RETURNING CHECKS TO REQUISITIONERS CAN BE A PROBLEM

HOW COMPANIES HANDLE CHECK RETURN REQUESTS BY REQUISITIONERS

FRAUD IN THE REAL WORLD

CONCLUDING THOUGHTS

Chapter 3 - CHECK STOCK: STOP THE FRAUDSTERS’ PRESSES

SECURITY FEATURES IN YOUR CHECK STOCK

WHAT ELSE?

SOME CHECK FRAUD SECURITY FEATURES

A WORD ABOUT VOID PANTOGRAPHS

VOID PANTOGRAPHS AND POSITIVE PAY

FRAUD IN THE REAL WORLD

CONCLUDING THOUGHTS

Chapter 4 - P-CARD: NOT AS BIG AN ISSUE AS YOU MIGHT THINK

PRINTING OF THE INVOICE

START OFF ON THE RIGHT FOOT

POLICY AND PROCEDURES MANUAL

SPELL OUT CONSEQUENCES

REQUIRE DOCUMENTATION

DON’T OVERLOOK RECEIPTS

ROLE OF A PROGRAM ADMINISTRATOR IN FRAUD PREVENTION

APPROVALS AND COMPLIANCE

ROLE OF LIMITS WITH RESPECT TO FRAUD

TRAIN, TRAIN, AND THEN TRAIN AGAIN

WHAT ABOUT INAPPROPRIATE USE?

FRAUD IN THE REAL WORLD

CLOSING THOUGHTS

Chapter 5 - ELECTRONIC PAYMENT FRAUD: NOT A GROWTH INDUSTRY—YET!

ACH BLOCKS

ACH FILTERS

ACH POSITIVE PAY

PAYMENT ACCOUNT DATA: IS IT ACCURATE?

ACH DATA ACCURACY: REAL-LIFE SOLUTIONS TO A VERY PRACTICAL PROBLEM

CPA’S PERSPECTIVE

FRAUD IN THE REAL WORLD

CLOSING THOUGHTS

Chapter 6 - DESKTOP FRAUD: FEW THINK ABOUT THIS—BUT EVERYONE SHOULD

EXAMPLE

OVERVIEW

ISSUES

RECOMMENDATION

LOVALLO’S GUIDELINES

BRINGING IT ALL TOGETHER

FRAUD IN THE REAL WORLD

CONCLUDING THOUGHTS

Chapter 7 - TRAVEL AND ENTERTAINMENT FRAUD: NOT ALL YOUR EMPLOYEES ARE HONEST

THE BOOK THAT TEACHES YOUR EMPLOYEES HOW TO STEAL

DANGER SIGNS

OTHER T&E SCAMS

DRAWING A LINE

LATEST T&E ISSUE: VERIFYING BOARDING PASSES PRINTED AT HOME

SOLUTIONS TO THE BOARDING PASS ISSUE

T&E FRAUD PREVENTION BEST PRACTICES

DETECTING EXPENSE REIMBURSEMENT FRAUD

UNIFORM ENFORCEMENT OF THE T&E POLICY

WHAT TO DO WHEN EXPENSE REIMBURSEMENT FRAUD IS DETECTED

LAST-DITCH COLLECTION EFFORTS

FRAUD IN THE REAL WORLD

CLOSING THOUGHTS

Chapter 8 - PETTY CASH FRAUD: PETTY INDEED

PETTY CASH AWFUL PRACTICES

HOW MUCH MONEY SHOULD THE BOX HAVE?

PETTY CASH BOX

SURPRISE AUDITS

WHERE DOES RESPONSIBILITY FOR THE BOX LIE?

DO WE STILL NEED PETTY CASH?

RECEIPT REVIEW

PETTY CASH VERSUS T&E

FRAUD IN THE REAL WORLD

CONCLUDING THOUGHTS

Chapter 9 - VENDOR AND INVOICE FRAUD: NOT EVERY INVOICE (OR VENDOR!) IS LEGIT

FRAUDULENT INVOICES—OR NOT

SOLICITATIONS THAT LOOK LIKE INVOICES

OTHER COMMON INVOICE FRAUDS

FRAUD AND POOR PAYMENT PRACTICES

A WORD ABOUT COLLUSION

BRIEF COMMENTARY ON PURCHASING

UP-FRONT VENDOR VERIFICATION

CONTROL CHALLENGE IN REAL LIFE

ADVICE FROM THE BETTER BUSINESS BUREAU

FRAUD IN THE REAL WORLD

CONCLUDING THOUGHTS

Chapter 10 - MASTER VENDOR FILE FRAUD: HOW EMPLOYEES PLAY GAMES WITH YOUR RECORDS

SOME REALLY BAD MASTER VENDOR FILE PRACTICES

MASTER VENDOR FILE REPORTS

CODING STANDARDS PREVENT FRAUD

CLEANSING THE MASTER VENDOR FILE

WHO HAS RESPONSIBILITY FOR THE MASTER VENDOR FILE

A NEW SYSTEM

MASTER VENDOR FILE AND YOUR EMPLOYEES

FRAUD IN THE REAL WORLD

CLOSING THOUGHTS

Chapter 11 - PAYROLL FRAUD: GHOSTBUSTING AND MORE

PHANTOM EMPLOYEES

WHAT YOU CAN DO TO DETECT AND PREVENT GHOST EMPLOYEES

FALSIFIED HOURS AND/OR SALARY

WHAT YOU CAN DO TO DETECT AND PREVENT EMPLOYEES FROM FALSIFYING DATA

COMMISSION SCHEMES

FALSE WORKERS’ COMPENSATION CLAIMS

SOME OVERALL PREVENTION TACTICS

FRAUD IN THE REAL WORLD

CONCLUDING THOUGHTS

Chapter 12 - TELECOM FRAUD: YES, IT CAN HAPPEN TO YOU

TYPES OF PHONE FRAUD

NUISANCE FRAUD

EXAMPLES OF CRAMMING

GETTING REFUNDS AND COMBATING CRAMMING

SLAMMING

PHONE SYSTEM AND VOICE MAIL FRAUD

SOCIAL ENGINEERING FRAUD

CALL FORWARDING/CONFERENCING PROBLEMS

VOIP FRAUD

FRAUD IN THE REAL WORLD

CONCLUDING THOUGHTS

PART TWO - STRATEGIES TO DETER, PREVENT, AND DETECT ALL SORTS OF ACCOUNTS ...

Chapter 13 - BEST PRACTICES—NOT: TACTICS THAT UNINTENTIONALLY PROMOTE FRAUD

CLOSING THOUGHTS

Chapter 14 - FRAUD MONITORING REPORTS: A NECESSARY EVIL

AUTOMATED MONITORING

HOW ANYONE CAN RUN REPORTS

A WORD ABOUT MORE SOPHISTICATED MONITORING

HOW MUCH CHECKING IS ENOUGH?

THE BIG REPORT EVERYONE SHOULD RUN

THE EASY REPORT

OTHER FRAUD DETECTION REPORTS

THE ACT LIST

CLOSING THOUGHTS

Chapter 15 - FRAUD DETECTION AND PREVENTION: SIMPLE TACTICS YOU CAN USE

2006 REPORT TO THE NATION FRAUD DETECTION

PRICEWATERHOUSECOOPERS 2007 GLOBAL ECONOMIC CRIME SURVEY FRAUD DETECTION

ANONYMOUS HOTLINES

WHAT COMPANIES CAN DO TO PREVENT FRAUD

SIMPLE TACTICS TO MAKE SURE NO ONE ROBS THE TILL ON YOUR WATCH

FRAUD IN THE REAL WORLD

CLOSING THOUGHTS

Chapter 16 - SARBANES-OXLEY

SARBANES-OXLEY

OVERVIEW OF THE ACT

SARBANES-OXLEY SURVEY

IMPACT OF THE ACT ON ACCOUNTS PAYABLE OPERATIONS

" OUTSIDE INFLUENCES

FUNCTIONS IMPROVED

T&E REIMBURSEMENT AND REVIEW PROCESSES

INTERNAL AUDIT REVIEWS

BACKUP FOR CHECK REQUESTS

RECORDS RETENTION POLICY

1099 REPORTING

INVOICES

MASTER VENDOR FILE

OTHER REGULATORY CONCERNS

USING THE ACT TO ENFORCE NEEDED CHANGE

THE ACT AND ITS EFFECTS ON PRIVATE COMPANIES

ETHICS

WHISTLE-BLOWER PROTECTIONS

THE ANONYMOUS HOTLINE

CONCLUDING THOUGHTS

Appendix A - FRAUD SCHEMES: PHYSICAL AND VIRTUAL CHECKS

Appendix B - 2007 TOP FRAUDS

Appendix C - SEGREGATION OF DUTIES

Appendix D - THE SARBANES-OXLEY ACT OF 2002 TITLES

RESOURCES

INDEX

This book is printed on acid-free paper.

Copyright © 2008 by Mary S. Schaeffer. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Schaeffer, Mary S. Fraud in accounts payable: how to prevent it / Mary S. Schaeffer. p. cm. Includes index.

eISBN : 978-0-470-43531-1

1. Accounts payable-Auditing. 2. Auditing, Internal. I. Title. HF5681.A27S36 2008 657’.74-dc22 2008011985