Distribution by Scientific Domains
Distribution within Business, Economics, Finance and Accounting

Kinds of Fraud

  • financial statement fraud
  • statement fraud

  • Terms modified by Fraud

  • fraud risk
  • fraud risk assessment

  • Selected Abstracts

    Climate for Scandal: Corporate Environments that Contribute to Accounting Fraud

    FINANCIAL REVIEW, Issue 1 2007
    Claire E. Crutchley
    G34; G38; K22 Abstract We examine the governance characteristics, earnings quality, growth rates, dividend policy, and compensation structure of 97 firms recently under investigation by the Securities and Exchange Commission (SEC) for accounting fraud. Our results show that the corporate environment most likely to lead to an accounting scandal manifests significant growth and accounting practices that are already pushing the envelope of earnings smoothing. Firms operating in this environment seem more likely to tip over the edge into fraud if there are fewer outsiders on the audit committee and outside directors appear overcommitted. [source]

    A Strategy for Dealing with Financial Reporting Fraud: Fewer Mandates, More Auditing,

    Steven E. Salterio
    First page of article [source]

    The Effects of Fraud and Going-concern Risk on Auditors' Assessments of the Risk of Material Misstatement and Resulting Audit Procedures

    Allen D. Blay
    This study uses audit file data to analyze the association between the auditors' preliminary assessments of going-concern and fraud risk and the planning and performance of the financial statement audit. We analyze the association between the above risks and the auditor's assessment of the risk of material misstatement (RMM) within the revenue cycle, and examine whether going-concern and fraud risk assessments have an effect on the persuasiveness, timing and extent of audit evidence gathered. Our results indicate that both fraud risk and going-concern risk are significantly related to RMM. Our results also indicate that although the effect of fraud risk is fully mediated by the RMM, moderate going-concern risk remains significantly related to our proxies for the persuasiveness and timing of audit evidence, even after controlling for RMM. [source]

    Simple tactics to prevent payment fraud

    Mary S. Schaeffer
    In this economy, payment fraud may be on the rise. But there are some simple tactics you can use to prevent payment fraud. The author explains what they are, and how to use them. This article is adapted from Fraud in Accounts Payable: How to Prevent It by Mary S. Schaeffer, published by John Wiley & Sons, Inc. © 2008 Wiley Periodicals, Inc. [source]

    The CFE: Another Weapon for Fighting Fraud

    Anthony M. Lendez
    Certified Fraud Examiners (CFEs) belong to the world's largest antifraud SWAT team. And one day, you may need their help. © 2001 John Wiley & Sons, Inc. [source]

    A Theory of Fraud and Overtreatment in Experts Markets

    Ingela Alger
    Consumers often rely on an expert's diagnosis to assess their needs. If the expert is also the seller of services, he may use his informational advantage to induce overtreatment, which is a pervasive phenomenon in experts markets. We offer and discuss conditions leading to equilibrium overtreatment in an otherwise purely competitive model. This market failure results from consumers' ability to turn down an expert's recommendation: experts defraud consumers to keep them uninformed, as this deters them from seeking a better price elsewhere. [source]

    Brandeis' Policeman: Results from a Laboratory Experiment on How to Prevent Corporate Fraud

    Michael D. Guttentag
    We use a laboratory experiment to study how to prevent corporate fraud. Our experiment is the first to replicate the salient features of corporate fraud in a controlled setting. We find that requiring additional disclosures significantly reduces fraud. This finding runs counter to implications from previous research, but that research does not include many of the defining aspects of corporate fraud. Our results support the federal government's continued reliance on disclosure as a way to reduce fraud, a reliance that dates back to Louis Brandeis' observation that "publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." [source]

    Deterring Fraud: The Role of General Damage Awards in Automobile Insurance Settlements

    David S. LoughranArticle first published online: 30 NOV 200
    Awards for pain and suffering and other noneconomic losses account for over half of all damages awarded under third-party auto insurance bodily injury settlements. This article hypothesizes that third-party insurers use general damage awards to reduce the incentive to submit exaggerated claims for specific damages for injuries and lost wages. Consistent with this hypothesis, the article finds evidence using data on over 17,000 closed bodily injury claims that special damage claims that exceed their expected value receive proportionally lower general damage awards than claims that do not. Among the implications of this research is the possibility that insurers will be less zealous in challenging fraudulent special damage claims under a third-party insurance regime than they will be under a first-party insurance regime in which access to general damages is limited. [source]

    EFD: A Hybrid Knowledge/Statistical-Based System for the Detection of Fraud

    John A. Major
    Electronic Fraud Detection (EFD) assists Investigative Consultants in the Managed Care & Employee Benefits Security Unit of The Travelers Insurance Companies in the detection and preinvestigative analysis of health care provider fraud. The task EFD performs, scanning a large population of health insurance claims in search of likely fraud, has never been done manually. Furthermore, the available database has few positive examples. Thus, neither existing knowledge engineering techniques nor statistical methods are sufficient for designing the identification process. To overcome these problems, EFD uses knowledge discovery techniques on two levels. First, EFD integrates expert knowledge with statistical information assessment to identify cases of unusual provider behavior. The heart of EFD is 27 behavioral heuristics, knowledge-based ways of viewing and measuring provider behavior. Rules operate on them to identify providers whose behavior merits a closer look by the investigative consultants. Second, machine learning is used to develop new rules and improve the identification process. Pilot operations involved analysis of nearly 22,000 providers in six metropolitan areas. The pilot is implemented in SAS Institute's SAS System, AICorp's Knowledge Base Management System, and Borland International's Turbo Prolog. [source]

    Zolpidem Dependence and Prescription Fraud

    Scott A. Golden M.D.
    No abstract is available for this article. [source]

    The Game of Electoral Fraud and the Ousting of Authoritarian Rule

    Beatriz Magaloni
    How can autocrats be restrained from rigging elections when they hold a huge military advantage over their opponents? This article suggests that even when opposition parties have no military capacity to win a revolt, opposition unity and a consequent threat of massive civil disobedience can compel autocrats to hold clean elections and leave office by triggering splits within the state apparatus and the defection of the armed forces. Opposition unity can be elite-driven, when parties unite prior to elections to endorse a common presidential candidate, or voter-driven, when elites stand divided at the polls and voters spontaneously rebel against fraud. Moreover, the article identifies some conditions under which autocrats will tie their hands willingly not to commit fraud by delegating power to an independent electoral commission. The article develops these ideas through a formal game and the discussion of various case studies. [source]

    Fraud or flawed: adverse impact of fabricated or poor quality research

    ANAESTHESIA, Issue 4 2010
    R. A. Moore Professor
    First page of article [source]

    Pious Frauds: ,Honest Tricks' and the Patterns of Anglican Devotional Thought in Richardson

    Abstract This essay identifies a series of apparent deceptions by two of Richardson's iconic moral paragons, Clarissa Harlowe and Sir Charles Grandison. It uses early modern Anglican thought to argue that such deceptions are best seen as ,lies', but also that the same body of theology allows for ,lying' in certain cases. Drawing on a range of Anglican thought from this period, it identifies in this literature a fascination with using ,indirect means' to bring about the ends of virtue, and concludes that Richardson picks up on this intellectual thread in his staging of morally complex fictional scenarios. [source]

    Appendix II: Syllabus on Scams and Frauds in Business, Fall 2006

    Article first published online: 20 JAN 2010
    First page of article [source]

    The Effectiveness of Alternative Risk Assessment and Program Planning Tools in a Fraud Setting,

    Abstract This study examines the impact of alternative risk assessment (standard risk checklist versus no checklist) and program development (standard program versus no program) tools on two facets of fraud planning effectiveness: (1) the quality of audit procedures relative to a benchmark validated by a panel of experts, and (2) the propensity to consult fraud experts. A between-subjects experiment, using an SEC enforcement fraud case, was conducted to examine these relationships. Sixty-nine auditors made risk assessments and designed an audit program. We found that auditors who used a standard risk checklist, structured by SAS No. 82 risk categories, made lower risk assessments than those without a checklist. This suggests that the use of the checklist was associated with a less effective diagnosis of the fraud. We also found that auditors with a standard audit program designed a relatively less effective fraud program than those without this tool but were not more willing to seek consultation with fraud experts. This suggests that standard programs may impair auditors' ability to respond to fraud risk. Finally, our results show that fraud risk assessment (FRASK) was not associated with the planning of more effective fraud procedures but was directly associated with the desire to consult with fraud specialists. This suggests that one benefit of improved FRASK is its relation with consultation. Overall, the findings call into question the effectiveness of standard audit tools in a fraud setting and highlight the need for a more strategic reasoning approach in an elevated risk situation. [source]

    Walls of secrecy and silence

    The Madoff case, cartels in the construction industry
    Research Summary Most analysts of the causes of the contemporary credit crunch have concluded that the supervising agencies failed in their duties. The same is true for studies of several major fraud scandals, including the Madoff affair and the Dutch construction fraud. The remedy seems immediately obvious: more and better regulation and supervision. However, this line of reasoning seems somewhat simplistic by ignoring the question of how illegal activities can remain hidden for many years from supervising agencies, victims, and bystanders. This research article argues that the problem also lies in the successful concealment of illegal activities by the perpetrators and in the presence of silence in their social environment. Policy Implications The cases analyzed in this article suggest that financial misconduct also could be controlled by breaking the conspiracies of silence. The strengthening of supervision is unlikely to be effective without simultaneous efforts to encourage people to speak out and to give them incentives to want to know and to tell the truth. [source]


    ECONOMIC AFFAIRS, Issue 1 2007
    Mike Bowron
    Financial crime has a devastating impact on individuals, companies and governments. Traditional methods of control, predominantly investigation and prosecution, have failed to abate the rise of both fraud and money laundering offences. Tackling financial crime is best approached from the perspective of prevention, an activity that requires co-operation between all those affected by this widespread and corrosive social problem. [source]

    Is Privately-provided Electronic Money Next?

    ECONOMIC AFFAIRS, Issue 1 2000
    Catherine England
    To survive, any new electronic money will need to provide some advantage to its users, such as lower transaction costs, increased privacy, a greater ability to avoid taxes, or a more stable value than its government-provided competitors. Any successful new money will have to overcome substantial barriers to entry, however. These barriers to entry occur primarily in the form of the costs of switching to a different means of payment and require an understanding of the role played by ,network economics.' Unless a substantial number of the individuals and businesses with whom a person trades use the same money, any new means of payment will have little value. A temptation facing government regulators will be to extend and expand regulations to apply to new means of payment and forms of money. A more productive role of governments is to attempt to protect their own money-creation franchises by minimising the advantages offered by privately-provided alternatives. Governments should enforce contracts and punish fraud while remaining vigilant with respect to inflation, keep tax rates low and protect the privacy of their citizens. [source]


    ECONOMICS & POLITICS, Issue 1 2005
    Miriam A. Golden
    Standard cross-national measures of corruption are assembled through surveys. We propose a novel alternative objective measure that consists of the difference between a measure of the physical quantities of public infrastructure and the cumulative price government pays for public capital stocks. Where the difference is larger between the monies spent and the existing physical infrastructure, more money is being siphoned off to mismanagement, fraud, bribes, kickbacks, and embezzlement; that is, corruption is greater. We create this measure for Italy's 95 provinces and 20 regions as of the mid-1990s, controlling at the regional level for possible differences in the costs of public construction. [source]

    Editorial: A case of scientific fraud

    ELECTROPHORESIS, Issue 12 2004
    Geoffrey J. Laurent
    No abstracts. [source]

    Research Ethics: Ethical Issues of Data Reporting and the Quest for Authenticity

    Catherine A. Marco MD
    Abstract. The search for truth and its unbiased reporting are ultimate goals of conducting scientific research. Ideally, the reporting of research data ought to be an objective task. In practice, however, it is fraught with numerous statistical and ethical pitfalls, seldom addressed in formal emergency medicine training. The lure of academic celebrity and related influences may persuade researchers to report results in ways that make data appear more interesting, or worthy of publication. Several examples of potentially misleading data reporting are illustrated, including using inappropriate statistical tests, neglecting negative results, omitting missing data points, failing to report actual numbers of eligible subjects, using inappropriate graph labels or terminology, data dredging, and others. Although potentially inaccurate or inflated methods of data reporting may not constitute overt scientific misconduct, the intentional misrepresentation of data is a form of fraud or deception. Publicly funded academic inquiry is a privilege and honor enjoyed by a trusted few. Regardless of outcome, every effort should be made to report data in the most scientifically accurate method. To this end, the Society for Academic Emergency Medicine Code of Conduct and American College of Emergency Physicians Code of Ethics provide important guidance toward the accurate, compassionate, competent, impartial, and honest conduct of scientific research. Accuracy and authenticity in data reporting are first and foremost a matter of individual integrity, and are crucial to the preservation of academic credibility, the protection of future patients, and the public's trust in the medical research enterprise. [source]

    Climate for Scandal: Corporate Environments that Contribute to Accounting Fraud

    FINANCIAL REVIEW, Issue 1 2007
    Claire E. Crutchley
    G34; G38; K22 Abstract We examine the governance characteristics, earnings quality, growth rates, dividend policy, and compensation structure of 97 firms recently under investigation by the Securities and Exchange Commission (SEC) for accounting fraud. Our results show that the corporate environment most likely to lead to an accounting scandal manifests significant growth and accounting practices that are already pushing the envelope of earnings smoothing. Firms operating in this environment seem more likely to tip over the edge into fraud if there are fewer outsiders on the audit committee and outside directors appear overcommitted. [source]

    Report from the Working Group of the Molecular Biology Society of Japan for the investigation of fraud in research papers

    GENES TO CELLS, Issue 8 2009
    Toshiki Tsurimoto
    First page of article [source]

    The Universal Postal Union's strategy for fighting "snail mail" fraud may be the key to making e-commerce safer

    Virginie Vial
    Open networks, high-tech or low-tech, are by their nature vulnerable to fraudulent use, and e-commerce platforms are increasingly targets of illegal activity. An international security initiative to reduce drug trafficking through the mails has devised strategies that could also be useful for protecting companies and consumers from online fraud. The author examines the characteristics of networks that make them vulnerable to abuse, and examines the Universal Postal Union's security scheme for working with national postal services to develop a comprehensive database of illegal transactions and upgrade screening processes for detecting them. Finally the author proposes a general framework of action for private companies. © 2008 Wiley Periodicals, Inc. [source]

    Internal audit, alternative internal audit structures and the level of misappropriation of assets fraud

    ACCOUNTING & FINANCE, Issue 4 2008
    Paul Coram
    M42 Abstract In recent years, the importance of good corporate governance has received significant public and regulatory attention. A crucial part of an entity's corporate governance is its internal audit function. At the same time, there has been significant public concern about the level of fraud within organizations. The purpose of this study is to assess whether organizations with an internal audit function are more likely to detect and self-report fraud than those without. In this study, we use a unique self-reported measure of misappropriation of assets fraud for the first time. The fraud data are from the 2004 KPMG Fraud Survey, which reported fraud from 491 organizations in the private and public sector across Australia and New Zealand. The internal audit data are from a separate mail survey sent to the respondents of the KPMG Fraud Survey. We find that organizations with an internal audit function are more likely than those without such a function to detect and self-report fraud. Furthermore, organizations that rely solely on outsourcing for their internal audit function are less likely to detect and self-report fraud than those that undertake at least part of their internal audit function themselves. These findings suggest that internal audit adds value through improving the control and monitoring environment within organizations to detect and self-report fraud. These results also suggest that keeping the internal audit function within the organization is more effective than completely outsourcing that function. [source]

    A genetic algorithm approach to detecting temporal patterns indicative of financial statement fraud

    Bethany Hoogs
    This study presents a genetic algorithm approach to detecting financial statement fraud. The study uses a sample comprising a target class of 51 companies accused by the Securities and Exchange Commission of improperly recognizing revenue and a peer class of 339 companies matched on industry and size (revenue). Variables include 76 comparative metrics, based on specific financial metrics and ratios that capture company performance in the context of historical and industry performance, and nine company characteristics. Time-based patterns detected by the genetic algorithm accurately classify 63% of the target class companies and 95% of the peer class companies. Copyright © 2007 John Wiley & Sons, Ltd. [source]

    Re Metcalfe: A matter of fraud, fairness, and reasonableness.

    The restructuring of the third-party asset-backed commercial paper market in Canada
    The recent market freeze in third-party asset-backed commercial paper in Canada has given rise to a restructuring proceeding of unprecedented size and complexity in Canada. It has led the Courts to refine and perhaps define the interpretative principles underpinning the determination of the scope of under-inclusive commercial legislation. This paper is a commentary on this unusual proceeding and the judicial analysis employed in the proceeding. Copyright © 2008 John Wiley & Sons, Ltd. [source]

    Hyperlinking Audited Financial Statements to Unaudited Information in the Presence of the WebTrust Logo: Hodge's Model Revised

    Ruth V. Pike
    This paper identifies a possible relationship between WebTrust, initiated by the AICPA/CICA as an attestation service for web sites, and the potentially misleading effect of hyperlinking audited financial statements to unaudited information. We argue that firms hyperlinking such information increase the perceived credibility of the unaudited information, which may be exacerbated by the presence of a recognisable, symbolically trustworthy logo. We formulate testable hypotheses by modifying an existing theoretical framework which relates to hyperlinked materials and their effect on investor judgements. The amended model extends to all potential users of financial information and incorporates the web-based assurance logo of WebTrust. We anticipate that this model will become instrumental in determining the extent of any expectation gap regarding user perceptions, thus facilitating the process of recommending policies to eliminate the potentially misleading effects of web-based financial information and therefore limiting the risk of corporate fraud and the legal liability of auditors. [source]

    Consumer morality in times of economic hardship: evidence from the European Social Survey

    *Article first published online: 1 FEB 2010, ClŠudia Abreu Lopes
    Abstract Crimes of everyday life, often referred to as unfair or unethical practices committed in the marketplace by those who see themselves and are seen as respectable citizens, have burgeoned as a result of the transformations in the European economy in the late 20th century, namely the transition to neo-liberal markets and the emergence of consumer society. A ,cornucopia of new criminal opportunities' has given rise to a new range of crimes such as ripping software, making false insurance claims or paying cash on hand to circumvent taxes. These shady behaviours (legal or not) are part of people's experience, albeit they are collectively regarded as morally dubious. Taken collectively, crimes of everyday life are indicators of the moral stage of a particular society and therefore a valuable instrument for social and political analysis. This paper addresses the question of whether and under which conditions feelings of economic hardship trigger crimes of everyday life. A multilevel theoretical and empirical perspective that integrates theories stemming from political science, sociology, and social psychology is adopted. I start by exploring the embeddedness of economic morality in social institutions, followed by an elaboration of the concept of market anomie to account for deviant behaviour in the marketplace, to finally step down to the examination of the correspondence between social attitudes and consumer behaviour, as postulated by the Theory of Planned Behaviour. The empirical study relies on micro data from the European Social Survey (ESS) (Round 2) and attempts to model, for each country, a formative measure of crimes of everyday life based on socio-demographic variables and the current economic situation, as it is perceived by the individual (taken as a measure of relative deprivation). The resultant country-specific regression coefficients are mapped onto the broader economic and normative context of 23 European countries. The results reveal that crimes of everyday life are driven by feelings of economic hardship only in countries where normative factors dictate their deviance. In countries where fraudulent behaviour is more generalized, inner motivations to offend play a secondary role as the more privileged consumers are more likely to commit fraud as they interact more often with the market. In turn, normative aspects result from a dynamic interplay of cultural and economic factors. As the economy grows faster, the tendency to offend in the market becomes more visible, but only in countries whose gross domestic product (GDP) stands above the European average. In countries with low GDP, the normative landscape is shaped by cultural factors that seem to obfuscate the power of economic factors favourable to consumer fraud. [source]

    Online shoppers in Australia: dealing with problems

    Huong Ha
    Abstract Although the Internet is a convenient platform to conduct commercial transactions, consumers are disadvantaged in the online marketplace due to insufficient information about goods and services as well as business and transaction process, lack of access to redress and several other problems. The number of complaints regarding online transactions increased in Australia from 2001 to 2005, and the number of Internet-fraud related complaints reported to Consumer Sentinel (USA) also increased from 2003 to 2006. This, in turn, has undermined consumer trust and impeded the growth of e-retailing as well as added to the fear among e-consumers of falling prey to online fraud. In spite of this, the nature and effectiveness of e-consumer protection has not been adequately studied, notwithstanding extensive research into other aspects of e-retailing. This article examines (i) the level of awareness of the respondents in the survey in Australia of the current policy framework for addressing consumer protection about online shopping in terms of redress; and (ii) the behaviour of the two groups of respondents in this survey who have and have not encountered problems with online purchases. The findings suggest that most respondents are not aware of the following issues, namely (i) which organizations are involved in e-consumer protection; (ii) government regulations and guidelines; (iii) industry codes of conduct; (iv) self-regulatory approaches adopted by business; and (v) the activities of consumer associations to protect consumers in the online marketplace. The findings also show that most respondents would seek redress if they were unhappy with their online purchases and if they knew how to proceed, and that most of them would settle disputes directly with e-retailers. Also, online shoppers who had encountered problems were more likely to continue purchasing via the Internet than online shoppers who had not encountered any problems. This suggests that respondents find that the benefits offered by e-retailing outweigh the risks associated with it. [source]