Acct Ch6 Employee Fraud And The Audit Of Cash

Front 1

White collar crime

Back 1

fraud by people who work in offices steal with pencil or computers.(contrast to violent street crime)

Front 2

Employee Fraud

Back 2

The use of fraudulent means to take money from an employer. consists of 3 phases

Front 3

3 phases of employee fraud

Back 3

1 the fraudulent act, 2 the conversion of money to the fraudster's use, 3 cover up

Front 4

Embezzlement

Back 4

fraud involving wrongfully taking money or property entrusted to their care, custody, or control. often accompanied by false accounting entrees, lying, and cover up

Front 5

Larceny

Back 5

simple theft of employers property not entrusted to the employees care, custody, and control

Front 6

defalcation

Back 6

employee fraud or embezzlement

Front 7

most frauds are detected based on the...

Back 7

cover-up

Front 8

catching people committing fraud or converting is...

Back 8

rare

Front 9

leads to high risk of fraudulent act

Back 9

motivation, opportunity, rationalization

Front 10

motive

Back 10

pressure a person experiences and believes unshareable with friends

Front 11

economic motive

Back 11

actual or perceived need for money

Front 12

psychotic motive

Back 12

"habitual criminal" who steals for the sake of stealing

Front 13

egocentric motive

Back 13

committing fraud for personal prestige

Front 14

ideological motive

Back 14

cause is morally superior, justified in making others victims

Front 15

opportunity

Back 15

an open door for solving the unshareable problems by violating a trust

Front 16

opportunities occur when...

Back 16

weak internal controls, circumvention of internal controls, great position and great trust and exposure to unprotected assets

Front 17

rationalization

Back 17

when people try to provide an argument to make their deviant behavior seem in line with their moral and ethical beliefs

Front 18

frequent rationalizations

Back 18

i need it more than the other person. im borrowing an ill pay it back. everybody does it. the company is big an d will never miss it. nobody will get hurt. im underpaid, this is due compensation.i need to maintain a life style and image

Front 19

red flags for employee fraud

Back 19

see star on paper slides

Front 20

cash

Back 20

highly liquid, easily transportable, not easily identifiable, primary target for employee thieves

Front 21

strong internal controls

Back 21

dual custody of cash at all times. lockbox arrangement. fidelity bonds*

Front 22

typical cash collection activities

Back 22

see star in papers slides