FRAUD EXAMINERS MANUAL

(INTERNATIONAL EDITION)

TABLE OF CONTENTS

VOLUME I
SECTION 1
FINANCIAL TRANSACTIONS AND FRAUD SCHEMES

ACCOUNTING CONCEPTS
Accounting Basics ........................................................................................................................ 1.101
Financial Statements .................................................................................................................... 1.105
Generally Accepted Accounting Principles (GAAP) .............................................................. 1.115

FINANCIAL STATEMENT FRAUD

What Is Financial Statement Fraud?.......................................................................................... 1.203
The Cost of Financial Statement Fraud .................................................................................... 1.204
Why Financial Statement Fraud Is Committed ....................................................................... 1.204
Trends in Financial Statement Fraud ........................................................................................ 1.206
Financial Statement Fraud Schemes .......................................................................................... 1.206
What Red Flags Are Associated with Financial Statement Fraud in General? ................... 1.233
Detection of Fraudulent Financial Statement Schemes ......................................................... 1.234
Financial Statement Analysis ...................................................................................................... 1.237
Interviews in Fraudulent Financial Statement Cases .............................................................. 1.243
Prevention of Financial Statement Fraud ................................................................................. 1.252

ASSET MISAPPROPRIATION: CASH RECEIPTS

Skimming ....................................................................................................................................... 1.301
Cash Larceny................................................................................................................................. 1.320
Theft of Cash on Hand ............................................................................................................... 1.333

ASSET MISAPPROPRIATION: FRAUDULENT DISBURSEMENTS

Register Disbursement Schemes ................................................................................................ 1.401
Check Tampering Schemes ........................................................................................................ 1.410
Electronic Payment Tampering ................................................................................................. 1.434
Billing Schemes............................................................................................................................. 1.436
Payroll Fraud Schemes ................................................................................................................ 1.455
Expense Reimbursement Schemes ............................................................................................ 1.473

2017 Fraud Examiners Manual (International) i

 FRAUD EXAMINERS MANUAL
(INTERNATIONAL EDITION)

FINANCIAL TRANSACTIONS AND FRAUD SCHEMES

ASSET MISAPPROPRIATION: INVENTORY AND OTHER ASSETS

Misuse of Inventory and Other Assets ..................................................................................... 1.501
Theft of Inventory and Other Assets........................................................................................ 1.502
Misappropriation of Intangible Assets ...................................................................................... 1.518

BRIBERY AND CORRUPTION

Corruption..................................................................................................................................... 1.601
Detection of Bribery Schemes ................................................................................................... 1.611
Conflicts of Interest ..................................................................................................................... 1.628
Anti-Corruption Programs ......................................................................................................... 1.639

THEFT OF DATA AND INTELLECTUAL PROPERTY

Competitive Intelligence Versus Espionage............................................................................. 1.701
Where Intelligence Professionals Get Information ................................................................ 1.704
Favorite Employee Targets of Intelligence Professionals ...................................................... 1.712
How Information Is Lost or Stolen .......................................................................................... 1.713
Electronic Countersurveillance .................................................................................................. 1.735
Insider Threats to Proprietary Information ............................................................................. 1.736
Investigating Corporate Espionage ........................................................................................... 1.742
Program for Safeguarding Proprietary Information ............................................................... 1.743
Minimizing the Risks of Misappropriation Claims.................................................................. 1.755

FINANCIAL INSTITUTION FRAUD

Embezzlement Schemes ............................................................................................................. 1.801
Loan Fraud .................................................................................................................................... 1.805
Real Estate Fraud ......................................................................................................................... 1.816
New Account Fraud Schemes .................................................................................................... 1.829
Money Transfer (Wire) Fraud Schemes .................................................................................... 1.833
Automated Teller Machine (ATM) Fraud ................................................................................ 1.836
Account Takeover ........................................................................................................................ 1.837
Advance-Fee Fraud ...................................................................................................................... 1.838
Letter-of-Credit Fraud ................................................................................................................. 1.839
Inside/Outside Frauds ................................................................................................................ 1.839
Prevention ..................................................................................................................................... 1.840
Suspicious Transaction Reports ................................................................................................. 1.842
The Basel Committee on Banking Supervision ....................................................................... 1.843

ii 2017 Fraud Examiners Manual (International)