Common Fraud Schemes

The 2008 Report to the Nation is a report issued by the Association of Certified Fraud Examiners that discusses who commits fraud and the most common ways that they do it. Some of the more common schemes are corruption, billing, skimming, and expense reimbursements. 

Corruption is when someone manipulates a business transaction for their personal gain. Kickbacks are a perfect example of corruption.

Billing is the category in this report that describes instances when the billing system is manipulated for personal gain. For example, submitting invoices from a fictitious vendor for payment or submitting invoices for personal expenses for payment.

Skimming is more common in companies with a lot of cash transactions. When a convenience store clerk accepts the cash payment but does not record the sale, the clerk is skimming.

Expense reimbursements refer to the practice of submitting fictitious or inflated business expenses for reimbursement.

You have probably heard of most of these schemes, however the challenge is developing controls to prevent and detect them. Need an assessment of your operational controls? Contact me.