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Practical Guide To Fraud including Cash, Inventory & General Frauds (Latest)

3.9 (50)

Mark Dauberman, CPA (US)

Mark Dauberman

  • CPA (Canada)
  • CFF
  • CIA
  • CMA
  • CPA (US)

Published: January, 2021

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Before starting this self study program, please go through the instructional document.

The topic is also scheduled as live webinar on the following dates

Aug 04, 2021 | 11:00 AM EDT Register

Overview

  • WHO? Fraud is committed by Desperate individuals
    13 mins
  • HOW? Common Schemes Used to Commit Fraud
    29 mins
  • WHY? Conditions Leading to the Commission of Fraud
    43 mins
  • Behavioral Warning Signs
    86 mins
  • Control Activities
    104 mins
  • Relationship of Characteristics to Prevention
    132 mins
  • Characteristics of an Opportunnist
    158 mins
  • Identify & Evaluate Weaknesses
    180 mins
  • Most common type of fraud affecting small business
    213 mins
  • Detection Opportunities
    255 mins
  • Understanding Shoplifting
    308 mins
  • Inventory Overstatement - Laribee Wire Manufacturing Corp
    355 mins

Course Description

In this 8 hour session, Mark Dauberman will explain a defined methodology with a step by step approach to fraud risk identification for asset misappropriation schemes and identifying the signs that may be indicators of fraud and the controls that may be effective for prevention. This CPE webinar will explore the ways inventory fraud may be committed and both common controls intended to prevent them as well as unconventional controls that may prove more effective when it comes to fraud prevention. The discussions will show how to incorporate the methodology into the planning stage of the audit. 

Session 1- FRAUD ESSENTIALS

For decades, the Association of Certified Fraud Examiners has been estimating the amount that entities lose to fraud on an annual basis.  In their “Report to the Nations – 2020 Global Study on Occupational Fraud and Abuse”, it estimates that entities lose roughly 5% of their revenues to fraud, comparable to findings in earlier years.  Despite endless studies on why and how it occurs, the creation of systems or controls to prevent it, and the development of internal reports to detect it, fraud continues to be a problem.

While many agree that it is a problem that will probably never be solved, there are approaches that may be more effective at mitigating it. This course looks at the profiles of the various types of fraud perpetrators, how it is committed, and the conditions under which it is likely to be successful.

This knowledge enables those responsible for the prevention or detection of fraud to establish different types of controls that will be more effective for different types of perpetrators, develop processes that make committing fraud more difficult, and modify the environment to avoid conditions that contribute to the success of fraudulent acts.

Any solution will involve the development of internal control activities, but it must be understood that conventional controls are rarely effective at fraud prevention. This course will identify the characteristics of controls that are more likely to be effective and provide examples of unconventional controls that have proven to be effective.

Major Topics Covered :

  • Who commits fraud?
  • How is it done?
  • Why do they do it?
  • What can we do to prevent or detect it?

Session 2- FRAUD PERPETRATORS AND HOW TO PREPARE FOR THEM

Fraud is an insidious crime. Commonly defined, fraud is an act in which attempts are made to deceive with promises of goods, services, or financial benefits that do not exist, were never intended to be provided, or were misrepresented. And each year, tens of millions of people fall prey to fraudulent schemes and practices. While conventional internal controls are rarely effective for preventing fraud, some less conventional controls have proven effective.  One size, however, does not fit all.  There are several different types of “typical” fraud perpetrators who commit fraud for different reasons, perform their fraudulent acts in different manners, and have different views on how their acts can be rationalized.

This course will profile 4 types of typical fraud perpetrators, and how the three characteristics of the fraud triangle, reason, opportunity, and rationalization, apply to each.  We will then use this information to develop a fraud prevention strategy for each. The strategies will be used to develop specific controls and to describe the characteristics of controls more likely to be effective than others.

Major Topics Covered :

  • The fraud triangle – the characteristics of fraud
  • Profiles of typical fraud perpetrators
  • Fitting the fraud triangle to the profiles
  • Characteristics of preventive controls
  • Developing preventive controls

Session 3- PREVENT & DETECT CASH FRAUD

Revenue and cash receipts are two critical areas that require strong controls to prevent intentional fraud or unintentional misstatements. While there is well-publicized fraud in these areas in larger companies, it also occurs, and can even be more likely to occur, in smaller businesses and not-for-profit entities. A sound system of internal control is needed to help prevent fraudulent activities and reporting related to the revenue and cash receipts cycle. 

According to the 2020 Report to the Nations, published by the ACFE, three of the five asset misappropriation schemes presenting the greatest risk involve the misappropriation of cash.  They are:

  • Check and payment tampering
  • Cash larceny
  • Payroll

A deficiency in internal control that prevents an entity from protecting its cash is putting that entity’s existence into jeopardy.  It is the management’s responsibility to develop, implement, and maintain controls to protect the entity’s assets from misappropriation as well as to otherwise achieve management objectives.  In addition, regardless of the actual relationship or the service performed by a CPA for a client, in many cases a client will hold the CPA responsible for the detection of fraud, and many even hold the CPA liable for fraud subsequently detected by others.

This course describes the most common types of fraud schemes used to misappropriate cash, including 

  • How Frauds are committed
  • The conditions under which frauds will be successful
  • The impact on various financial statement components  
  • Identifying the signs that may be indicators of fraud and the controls that may be effective for prevention.

Session 4-PREVENTING & DETECTING INVENTORY FRAUD

Inventory is one of the biggest assets on a manufacturer’s balance sheet. It’s also one of the hardest assets to measure and track. Thousands of transactions flow through the inventory account each year — and many of these journal entries require subjective estimates, such as overhead allocations, write-offs, and valuation adjustments. In addition, many employees have direct daily access to inventory or inventory accounting records, providing an ongoing temptation to steal or cook the books. The retail industry estimates shoplifting losses at roughly $50 billion per year.  Meanwhile, the ACFE estimates that 8% of occupational fraud involves the purchasing or warehousing and custody of inventory.  With a total of $4.5 trillion, or 5% of GDP lost to occupational fraud, this is an additional $360 billion for a total of over $400 billion lost to inventory-related fraud each year.

Inventory fraud can occur during the acquisition, storage, manufacture, or sale of inventory. Unanticipated inventory shortages due to theft, overpayment for inventory due to collusion with a supplier, and over-ordering inventory due to a conflict of interest can have a devastating effect on a business and maybe the difference between success and failure. The examples mentioned above are only a few of the many schemes related to inventory fraud.  It is incumbent on management to protect inventory and to make certain that goods conforming to the entity’s needs are acquired at reasonable prices and are used as intended to avoid a competitive disadvantage.

In addition, we will also discuss information from which expectations can be derived to develop analytical procedures and management reports useful for detection.

Cases involving inventory losses will be used to highlight various schemes and controls.

Learning Objectives

  • To recall the components of the COSO model of internal control and how they interact to prevent and detect fraud.
  • To recognize various ways for identifying vulnerabilities to fraud and finding the types of fraud preventive techniques that may be effective.
  • To recognize how the fraud triangle is applicable to the different fraudsters
  • To identify methods of creating an anti-fraud culture
  • To recognize different fraud schemes involving cash and the risk of each occurring

Who Should Attend?

  • Accountant
  • Accounting Managers
  • Accounting Practice Owners
  • Accounts Director
  • Bookkeeper
  • Cloud Accountants
  • CPA (Industry)
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • CPA in Business
  • Entrepreneurial Accountant
  • Entrepreneurial CPA
  • Senior Accountant
  • Staff of Accounting Firm
  • Tax Accountant (Industry)
  • Young CPA

Testimonial

3.9

(50)
34%
36%
20%
10%
0%

FB

Interesting course with videos, case studies and solutions. Learnt new terms and definition on the different ways to fraud and how to prevent it. You may already know some of the internal controls processes if you were from finance or audit sector though. Notes in pdf to enable students to follow through and reinforce the learning experience.

JL

The concepts were easy to understand since I already had a fair idea about accounting however, sometimes the visualization seemed to distract me from the course... Perhaps another type of visualization is better.

VK

This course has been absolutely amazing. My understanding and knowledge of the different types of skimming and forensic accounting overall have increased. The lecturer also makes it very easy to understand by including the implementation of cartoon characters and visual examples.

BW

I did not know about Forensic Accounting and the methods of fraudulent actions against businesses. I learned a great deal to begin. I think the course was pretty much perfect with they way it is designed to provide information and then , insure than information was learned. The quizzes are not difficult as long as you don't fall asleep. He teaches the information well.

DH

If you want profound and holistic knowledge of Accounting and Auditing, then this is the right CPE course. This course gives insights into various types of frauds that take place in the Finance domain. It highlights different forensic auditing methods which are used to tackle the frauds, gives insights to the investigation methods. The course also offers various case studies which makes it easy to understand the problems, questions and examine the study and thus, get a quality knowledge about the subject.

SL

Mark is an outstanding presenter and his practical approach to fraud made this webinar especially good and relevant. I truly appreciated his citations and I will buying a couple of the books that he suggested. And as always, the best examples are often on YouTube - and Mark's selection of those pieces was also excellent!