$16 million was stolen from a bakery. You read that right. Today
Fraud
Fraud occurs when assets are stolen or financial statements are intentionally misstated. The Association of Certified Fraud Examiners (ACFE) estimates that companies, on average, lose 5% of revenues to fraud annually. The ACFE categorizes fraud in three categories: (1) asset misappropriation, (2) corruption, and (3) financial statement.
Asset Misappropriation
Asset misappropriation is a scheme whereby an employee steals. These schemes include the skimming of cash receipts, theft of physical assets, fictitious vendors, and tampering with checks.
This is the most common form of fraud but is usually the least costly.
Corruption
Corruption is the misuse of an employee's influence to derive personal benefit. An example is an employee's receipt of a bribe from a vendor.
While corruption is less common than asset misappropriation, it is usually more costly.
Financial Statement
Fraud also occurs when companies intentionally misstate their financial statements (sometimes called "cooking the books"). In doing so, stock prices might increase and owners and management can sell their stock for fraudulent gains.
This the least common fraud, but, on average, is the most costly.
Below are fraud-related articles to assist you in understanding theft schemes.
Misappropriation Articles
Backdoor Payroll Theft of Withholdings
Backdoor payroll theft is not common, but it is a real threat.
Three Receipt-Fraud Tests (for Auditors)
Today I provide three receipt-fraud tests for auditors. The audit standards require
City Manager Pockets Cash from the Sale of Excess Property
The Theft Is it possible to convert large pieces of excess property
A Fraudster’s Refuge: The Appalachian Trail
Some fraudsters funnel money into fraudulent bank accounts. Today, I show you
Fraudulent Payments Without Being on the Signature Card
Today I show you how bookkeepers can make fraudulent payments without being
College Aid Official Funnels Student Funds of $4.1 Million to Herself
Theft from colleges happens more than we think. After all, aren’t these
Nonprofit Embezzlers Sell Donated Goods for Millions
Sometimes nonprofit embezzlers sell donated goods. Today, we examine how nonprofit employees
Do (Some) Librarians Steal? Yes (and With Vigor)
Do some librarians steal? While most don’t, some do. Today we see
Is Your Cash Receipts Supervisor on the Take?
Sometimes the person you hire to prevent theft is the one stealing.
Would Andy Griffith Steal? Receipt Fraud in Law Enforcement
Would Andy Griffith steal? Maybe not. But other law officers do. Thankfully,
Stealing Unaccrued Receivable Checks is Easy
Stealing Unaccrued Receivable Checks Some fraudsters steal unaccrued receivable checks and convert
Splitting Payments to Circumvent Approval Requirements
Some fraudsters split payments to circumvent approval requirements. In this article, I
The Rita Crundwell Story: Why Some Ranches Have a Bad Smell
Is it possible for one person to steal over $53 million from
How Employees Steal with Company Credit Cards
Employees sometimes steal with company credit cards. Today, we look at a
Payroll Fraud: I Get By with a Little Help from my Friends
Payroll fraud is quite common. Sometimes the theft occurs as a payroll
How Honest People Steal
Honest people steal. White collar crime is real. Nice, innocent-looking people take
Stealing While Dying: A Motive for Fraud
Some fraudsters steal while dying. What’s their motive? Possibly to avoid leaving
How Fraudsters Steal with Inflated Invoices
Fraudsters can steal with inflated invoices. In the story below, you’ll see
How to Steal by Double Paying a Vendor
The Theft Fraudsters can steal by double paying a vendor. In this
Fraudsters Writing Checks to Themselves: How to Understand It and Prevent It
The Theft Fraudsters do write company checks to themselves. Today I tell
Converting Company Checks to Cash: How to Understand It and Prevent It
Theft of Capital Assets: How to Understand It and Prevent It
The Theft In businesses, nonprofits, and governments, the theft of capital assets
Check-for-Cash Fraud: How to Understand It and Prevent It
The Theft The check-for-cash fraud scheme is a simple yet effective way
Ghost Employee Fraud: How to Understand It and How to Prevent It
The Theft Last year I received a phone call. The payroll clerk
Wire Transfer Fraud: How to Understand It and Prevent It
Skimming Cash Payments: How to Understand It and How to Prevent It
Skimming cash payments is a common theft, especially if receipting controls are
Fictitious Vendor Fraud: How It Occurs and How to Prevent It
Fictitious vendor fraud is one of the more dangerous ways employees steal.
Thefts of Cash From Local Governments are Common
Thefts of cash from local governments are common, are they not? How
The Dangers of a Trusted Bookkeeper
Many small businesses experience great harm because they do not understand the
Corruption Articles
Nonprofit Fraud: Bid-Rigging, Kickbacks and Faulty Payments
We sometimes think of nonprofit fraud as nonexistent. After all, these are
How Bribery Works: How to Understand It and Prevent It
The World Bank estimates that over $1 trillion in bribes are offered
Financial Statement Articles
How Accounting Tricks Inflate Earnings: How to Understand It and Prevent It
The Theft Accounting tricks can inflate earnings. One Wall Street Journal article
