For decades, the Association of Certified Fraud Examiners has been estimating the amount that entities lose to fraud on an annual basis. Their "Report to the Nations - 2020 Global Study on Occupational Fraud and Abuse" estimates that entities lose roughly 5% of their revenues to fraud, comparable to findings in earlier years. Despite endless studies on why and how it occurs, the creation of systems of controls to prevent it, and the development of internal reports to detect it, fraud continues to be a problem. While many agree that it is a problem that will probably never be solved, there are approaches that may be more effective at mitigating it. This course looks at the profiles of the various types of fraud perpetrators, how it is committed and the conditions under which it is likely to be successful. This knowledge enables those responsible for the prevention or detection of fraud to establish different types of controls that will be more effective for different types of perpetrators, develop processes that make committing fraud more difficult and modify the environment to avoid conditions that contribute to the success of fraudulent acts. Any solution will involve the development of internal control activities, but it must be understood that conventional controls are rarely effective at fraud prevention. This course will identify the characteristics of controls that are more likely to be effective and provide examples of unconventional controls that have proven to be effective.
Learning Objectives
- Understand who commits fraud and how it is committed
- Learn to identify the conditions under which fraud is more likely to occur successfully
- Recall the components of the COSO model of internal control and how they interact to prevent and detect fraud
- Establish a method for identifying vulnerabilities to fraud and finding the types of fraud preventive techniques that may be effective
Major Topics
- Who commits fraud
- The nature and characteristics of fraud
- An overview of internal control applying the COSO model
- Characteristics that make internal controls more effective for preventing fraud
- Examples of unconventional controls that have proven effective as prevention tools
