Management Training:Fraud Prevention Vender

and Consumer

Presented by Bayo Cary

1March 15, 2015

Vendor Protection Against Fraud and

Consumer Protection Against Fraud

• Fraud Mitigation Program (F.M.P.)

• Consumers Safety and Protection

• Covert Investigation Techniques

• Employee Training: Internal Fraud Control

• Conclusion: Vendor and Consumer

Protection Chart

2

Vendor Protection Against Fraud:

Fraud Mitigation Program (F.M.P.)

1) Research of Current Fraud Prevention Plan

2) Require Employee Fraud Assessment by Unit

3) Compile Fraud Research Data for Risk Analysis

4) Provide Fraud Prevention Training and Awareness

5) Design of New Improved Fraud Prevention

6) Implement Continued Fraud Assessment/Analysis

7) Provide Employees with New Fraud Prevention:

Rules, Polices, Guidelines, Reporting Procedures,

and Consequences of Fraud in the Workplace.

8) Continuing Evaluation and Improvement

F.M.P. includes the 5 C.O.S.O. elements: Internal Control

3

Fraud Mitigation Program (F.M.P.)

Risk Assessment: Evaluation• Identify High Risk Departments/Unit

• Review Documented Audit Inaccuracies

• Address Areas of Exclusive Management Control

• Override and Security Practice Violations

• Review Thoroughness of 3rd Party External Audit

• Money Allocated/Spent on Fraud Issues/Prevention

• Effectiveness of Current Fraud Prevention Program

• Redesigned Fraud Prevention/Mitigation Plans

• Follow up Fraud Prevention Analysis

• Continued Implementation of 3rd Party External

Audit for Sarbanes-Oxley Compliance4

Fraud Mitigation Program (F.M.P.)

Goals and Objectives: Outline

Implement Successful Fraud Prevention Plans

Following All Government Required Fraud Prevention

Protecting Product and Service Quality and Market share

Encouragement of Employees: Vigilance Against Fraud

Reinforcing Top Down Support for Fraud Prevention

Reinforcing Employee Role in Fraud Prevention

Support for Employees who Report Suspected Fraud

Investigation in cases of suspected Fraud

Prosecution of Employees Who Commit Fraud

Message to Employees that Fraud is Not Tolerated5

Consumer Protection:

Regulations, Organizations, RightsThe U.S. has in place, legally enforceable:

rules, standards, regulations, and

organizations, which establish “Rights,” to

protect the consumer, from fraud.

6

Organizations engage in a number of activities, which

serve to protect consumers from fraud: “protests,

litigation, campaigning, or lobbying.” The Better

Business Bureau in acts as a consumer: “watchdog.”

The Federal Trade Commission (F.T.C.) was established

By the U.S. Government, to protect consumers against

Market monopolies, and acts of fraud in big business.

Fraud Investigation-Covert:

Research/Evidence Collection• Investigations that are Undercover

• Laws/Rules Regulate Undercover Investigation

• Laws/Rules Covering Covert Ops Vary by U.S. State

• Initial Covert Investigations Preserve Court Evidence

• “Probable Cause” Allows Covert Investigations

• Covert Investigations May Require A Professional

• Covert Investigations May Require Law Enforcement

• Covert Investigations Can Be Successful and Fruitful

7

Fraud Investigation-Covert:

Practices and Methods

• Camera Use and Video Taping

• Conversation Records and Recording

• Computer Data Analysis and Collection

• Finger Print Collection

• Physical Evidence Collection in General

• “Mobile Surveillance”

• Interviews

• Public Records Collections

• Wire Tapping8

Fraud Investigation-Covert:

Vulnerability Chart

9

What has

been

stolen?

Who

could

have

committed

fraud?

How were

the

missing

item(s)

stolen?

How was

the crime

hidden?

How were

the stolen

item(s)

converted

to cash?

What were

the Red

flags?

What were

the culprit’s

pressures?

What was

the culprit’s

reasoning?

What internal

controls were

in place? Or

not in place?

Based on Text: Fraud Examination, 4th Edition

Fraud Investigation-Covert:

Evidence Collection and Value

• Evidence Supports a Court Ruling of Guilty

• Evidence is Required for a Court Case

• Evidence Proves the Innocence of Others

• Absence of Evidence does not prove Innocence

• Evidence Must be Collected Carefully for Court

• Evidence Can be Destroyed of Altered

• Analysis of Evidence Often Requires a Specialist

• Analysis of Evidence must be done by Professionals

• Correct Evidence Analysis Leads to Right Conclusion

10

Fraud Investigation-Covert:

Types/Usefulness of Evidence• Original Copies

• Unaltered Evidence

• Personal Statements/Notes and Emails

• Confessions

• Conspicuous Evidence, i.e. Life Style

Change

• Plethora of Evidence

• Evidence Representing a Long Duration

• Clear Video or Voice Recordings

• Personal Records: Bank, Credit Card, etc.11

Presentation Conclusion:

Vender/Consumer Protection Chart

12

Govnm’t

Laws, and

Rules

Employee

Fraud

Training

Employee

Whistle

blowing

Business

Fraud

Detection

Internal/

External

Audits

Govnm’t

Fraud

Detection

Protects a

businesses,

from

culpability.

Protects a

business

from loss to

due fraud.

Protects a

business by

providing

tips about

fraud that

must be

looked in to.

Detection

and

investigation

of fraud,

help to

prevent

future fraud.

Double

checks, for

any

indications

of fraud.

Follow up

fraud

detection-

when

warranted,

to reinforce

rules/laws.

Protects a

consumer

damages

and financial

losses.

Protects a

consumer,

by keeping

the business

fraud free.

Protects a

consumer,

by

eliminating

fraud in a

business.

Ensure a

product

business

remain of

the highest

quality and

standards.

Increases

the trust

worthiness

and

credibility of

the business

for reliability.

Protects

consumers

from

investing/&

supporting

Worthless

Businesses.

Works CitedAlbrecht, Steve, W., Albrecht, Chad, O., Albrecht, Conan, C.,

Zimbelman, Mark, F.(2012). Fraud Examination, Fourth

Edition. Retrieved from http://www.coursesmart.com/9780538470841/firstsection#X2ludGVybm

FsX0J2ZGVwRmxhc2hSZWFkZXI/eG1saWQ9OTc4MDUzODQ3MDg0

MS9paQ==

Fleming, A. Scott, Pearson, Timothy A., Riley Jr., Richard A.

(Nov. 2008).West Virginia University: Forensic Accounting and Fraud Investigation

(FAFI). Issues in Accounting Education, Vol. 23(Issue 4). Retrieved

from

http://eds.a.ebscohost.com.proxy1.ncu.edu/eds/pdfviewer/pdfviewer?vi

d=3&sid=7ae55d1c-6326-4760-a381-

769df3234f9c%40sessionmgr4005&hid=4213

13

Jundi, Shyma, Vrij, Aldert, Hope, Lorraine, Mann, Samantha,

Hillman, Jackie.(Aug.2013). Establishing evidence through

undercover and collective intelligence interviewing.Psychology, Public Policy, and Law, Vol 19(3). Retrieved from

http://eds.b.ebscohost.com.proxy1.ncu.edu/eds/detail/detail?vid=3&sid=72

28d95a-5f51-

45bd8a662b96fc6c6c17%40sessionmgr110&hid=114&bdata=JnNpdGU9Z

WRzLWxpdmU%3d

Laxman, Shalini, Randles, Ronald, Nair, Arun. (Feb 2014). The

Fight Against Fraud. Internal Auditor, Vol 71. Retrieved from http://eds.a.ebscohost.com.proxy1.ncu.edu/eds/pdfviewer/pdfviewer?vid=2

0&sid=7ae55d1c-6326-4760-a381-

769df3234f9c%40sessionmgr4005&hid=4213

No Author. (n.d.). Purdue OWL: APA Formatting. Retrieved from

https://owl.english.purdue.edu/owl/resource/560/10/

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No Author. (May 2010). Is Your Master Vendor File Ready for a

Spring Cleaning? Managing Accounts Payable, Vol. 10.

Retrieved from http://eds.a.ebscohost.com.proxy1.ncu.edu/eds/pdfviewer/pdfviewer?vid=16

&sid=7ae55d1c-6326-4760-a381-

769df3234f9c%40sessionmgr4005&hid=4213

Tackett, James, A. (May/Jun2008). Covert investigations in the

workplace. Journal of Corporate Accounting & Finance (Wiley),

Vol. 19 Issue 4, p7-11.. doi:10.1002/jcaf.20396

Trotman, Ken T., Wright, William F. (2012). Triangulation of audit

evidence in fraud risk assessments. Accounting, Organizations

and Society. 2012 37(1):41-53.doi:10.1016/j.aos.2011.11.003

Wikipedia/Consumer Protection. (n.d.). Retrieved March 15, 2015

from the Wikipedia Wiki:

http://en.wikipedia.org/wiki/Consumer_protection

15

Wikipedia/Federal Trade Commision. (n.d.) Retrieved march 15,

2015 from the Wikipedia Wiki:

http://en.wikipedia.org/wiki/Federal_Trade_Commission

Wikipedia/Consumer Organization (n.d.). Retrieved March 15,

2015 from the Wikipedia Wiki:

http://en.wikipedia.org/wiki/Consumer_organization

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