NCJ Number
160920
Journal
NCSA (National Computer Security Association) News Volume: 6 Issue: 3 Dated: (Quarter 3 Pages: 1995),P 16-19
Date Published
1995
Length
4 pages
Annotation
After an overview of corporate fraud detection, this article provides guidelines for discerning and detecting corporate fraud, and the legal parameters for fraud auditing.
Abstract
Frauds vary in terms of the techniques used, but accounting "red flags" do give off some inkling of fraud. Some of these "red flags" are the adjustment of journal entries that lack authorization and supporting details; expenditures that lack supporting documents; false and improper entries in books of account; unauthorized payments; the unauthorized use of corporate assets; the misapplications of corporate funds; and destruction, counterfeiting, and forgery of documents that support payments. When an allegation of employee fraud, theft, embezzlement, or corruption is received by a corporate security investigator, procedures should include an assessment of the credibility of the complainant and the plausibility of his/her charges; determination of whether testimonial, documentary, and demonstrative evidence is available to support the allegation; and the preparation of a report of the facts as determined thus far and submission of the report to inhouse counsel for permission to open an active case. This article also outlines the distinction between fraud auditing and forensic accounting. A question-and-answer format examines legal parameters pertinent to fraud auditing. Components in the evolution of an accounting system fraud are also listed