Fraud 101: Techniques and Strategies for Understanding Fraud

Fraud 101: Techniques and Strategies for Understanding Fraud

Fraud 101: Techniques and Strategies for Understanding Fraud

Fraud 101: Techniques and Strategies for Understanding Fraud

Synopsis

A straightforward guide explaining the nature of financial fraud

Fraud continues to be one of the fastest growing and most costly crimes in the United States and around the world. The more an organization can learn about fraud in general and the potential fraud risks that threaten the financial stability of the organization's cash flow, the better that organization will be equipped to design and implement measures to prevent schemes from occurring in the first place.

Fraud 101, Third Edition serves as an enlightening tool for you, whether you are a business owner or manager, an accountant, auditor or college student who needs to learn about the nature of fraud. In this invaluable guide, you will discover and better understand the inner workings of numerous financial schemes and internal controls to increase your awareness and possibly prevent fraud from destroying your organization's financial stability.

It offers guidance, understanding, and new, real-world case studies on the major types of fraud, including

  • An understanding of why fraud is committed
  • An overview of financial fraud schemes
  • White-collar crime
  • Uncovering employee embezzlements
  • Establishing internal fraud controls
  • The nature of collecting evidence

With case studies included throughout the book to gain insight to the real world of fraud, Fraud 101, Third Edition describes the features of fraud and then provides proven methods of prevention, as well as solutions to expose different types of fraud.

Excerpt

At the time of this writing of the third edition of Fraud 101, the U.S. economy is facing extraordinary challenges. Wall Street and the entire global economic and financial system are in steep decline, and the economy is in a worldwide recession. Financial institution Lehman Brothers recently filed for bankruptcy, the insurance giant AIG is in dire financial straits and required taxpayer bailouts to survive, and the mortgage giants Fannie Mae and Freddie Mac are in deep jeopardy. The U.S. federal government approved a historic funding package of up to $750 billion in stimulus payments to be made to various financial markets and industries in distress with the goal of stimulating the economy. Payments to date appear to have had little impact with no proven results on the economy.

In one of the most egregious cases in history, Bernard Madoff, a financier and investment manager, recently admitted to embezzling more than $50 billion of investors’ funds through an elaborate Ponzi scheme he perpetrated. Allegedly, the money he paid to early investors was from funds received from subsequent investors, and when too many investors demanded their funds in response to the failing economy, the scheme collapsed. Although Ponzi schemes are common and have occurred many times in history, Madoff’s scheme is the largest Ponzi scheme ever. The dimension of fraud cases is becoming unfathomable—multi-millions and even billions are becoming commonplace.

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