November 2, 2011
The Corporate Con: The Internal Fraud and The Auditor
In the movie the Corporate Con: The Internal Fraud and the Auditor there were several different people who seemed like your everyday "Joe," but were actually criminals who committed fraud. Some of the frauds committed in this movie were: Cash Fraud, Accounts Receivable Fraud, Expense Fraud, purchasing fraud, and corruption. Focusing on two individuals Pam and John, each of these criminals committed either cash or accounts receivable fraud. Pam was a graduate from high school who found work soon after graduation. She felt she wasn't getting paid enough for her work so she started stealing cash from the register and other places from where she worked. The type of fraud she committed was cash fraud. Cash is usually the focal point of many accounting entries. Cash on deposit in banks and petty cash, can be stolen through numerous different schemes. The schemes committed are either on-book or off-book, depending on the point of occurrence of the fraud scheme. Generally, a company focuses on cash scheme frauds, rather than other types of fraud because money getting stolen from the company is the easiest fraud that can be committed. Some of the basic cash fraud patterns are: skimming, voids/ under-rings, swapping cash for checks, alteration of cash receipt documentation, fictitious refunds and discounts, journal entries and kiting.
Skimming is the process by which cash is removed from a victim entity before the cash is recorded in the accounting system. When an employee skims from a company they are stealing sales and receivables before they can be recorded into the company's book. These are considered off-book schemes since the receipt of the of the cash is never recorded. Since the stolen funds are never recorded, there is no direct audit trail. In the video Pam tells the audience how it felt after she was caught skimming....
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