Guide to Preventing Workplace Fraud - Chubb Group of Insurance ...

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■ Minimization: “I’m not taking very much. The company can easily afford it.” ■ Moral justification: “Everyone else is doing it, so it must not be so bad to do this.” Rationalizations are not generally known to others and therefore are usually difficult to detect. In addition, persons with low moral integrity may feel little need to rationalize their behavior. 10
THE TYPES OF FRAUD The Association of Certified Fraud Examiners (ACFE) categorizes fraud threats to businesses in the following ways: ■ Asset misappropriation, ■ Fraudulent financial statements and records, and ■ Corrupt or prohibited practices. Asset Misappropriation Simply put, asset misappropriation can be thought of as a theft of something of value that belongs to your business. When it comes to asset misappropriation, “cash is king.” In other words, cash is the most frequently targeted asset. Consider: ■ According to a 2004 national survey by the ACFE, 93% of the asset misappropriation cases studied involved cash, and the median loss was $93,000. ■ “Cash” targets include currency and coins, checks, electronic funds, financial instruments, rebates, credits, discounts, and virtually any other device or means of financial exchange or enrichment. ■ Cash is targeted for obvious reasons—it has a clearly known value, is easily transferable and transportable, is difficult to trace, and may even be diverted before any record exists on company books. ■ Cash may be targeted by external or internal perpetrators or even by both via collusion. 11
Page 1 and 2: Guide to Preventing Workplace Fraud
Page 3: GUIDE TO PREVENTING WORKPLACE FRAUD
Page 7: CONTENTS Introduction .............
Page 10 and 11: focus on prevention, detection, and
Page 12 and 13: The Fraud Triangle What motivates p
Page 16 and 17: Cash-diversion schemes range from s
Page 18 and 19: FRAUD RISK MANAGEMENT- LOSS CONTROL
Page 20 and 21: General fraud detection practices.
Page 22 and 23: ■ “Vendor audits,” which typi
Page 24 and 25: company. Checks with identified inc
Page 26 and 27: ■ Investigate Forms W-2 and 1099,
Page 28 and 29: Segregation of duties may be diffic
Page 30 and 31: In many companies, vendor payments
Page 32 and 33: ■ “Vendor audits,” which typi
Page 34 and 35: The above scenario presents a numbe
Page 36 and 37: part of computerized records and ar
Page 38 and 39: software, and color laser printers
Page 40 and 41: Misappropriation of Waste, Scrap, a
Page 42 and 43: Expense Account Reimbursement Fraud
Page 44 and 45: Payroll fraud may involve collusion
Page 46 and 47: ■ Employee correspondence sent to
Page 48 and 49: ■ Design and implement safeguards
Page 50 and 51: ■ Foster a strong “perception o
Page 52 and 53: Many companies require that employe
Page 54 and 55: ■ Callers are asked to call back
Page 56 and 57: ABOUT THIS BOOKLET This booklet was
Page 60: Chubb Group of Insurance Companies

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