Preventing Employee Fraud: An Introduction

 Employee fraud costs the typical organization 5% of its revenues in a given year. According to the Association of Certified Fraud Examiners (ACFE) losses are in the billions of dollars with an average loss per case at $2.7 million.

The impact of fraud in enormous. It has become a global threat to business success. No industry is immune. Fraud occurs in major corporations, non-profits, charities and educational institutions. It can be found in religious groups and virtually every level of government. In fact, the ACFE estimates that no less than 1/3 of U.S. business failures are the result of fraudulent activities.

This course addresses an immediate need. It provides an awareness of the employee fraud problem. It then provides the learner with the many different forms fraud takes in the workplace. These range from expense account scams and kickbacks to the misappropriation of company assets and fraudulent financial statements. The course then discusses the importance of an organizational anti-fraud program and the implementation of internal controls to minimize business losses.

This course is specifically tailored for:

• Business owners and managers

• Front-line supervisors

• Human resources specialists

• Students of business or public administration

• Corporate compliance and legal entitities

• Corporate security professionals

• Public sector managers and government officials

Preventing Employee Fraud: An Introduction is unique because of its generic approach to employee fraud. The concepts presented are applicable to all businesses and organizational environments. The author is a security professional with over 30-years of leadership experience in both the private and public sectors. The course is divided into 13 focused sections with the utmost respect for the learner's time. As an introductory course, this program sets the tone for future offerings from this instructor, including Conducting Internal Fraud Investigations and Managing the Internal Threat.

Authoritative, relevant and affordable, Preventing Employee Fraud: An Introduction is the ideal tool for those responsible for the bottom-line, the protection of assets, and for leaders seeking a competitive advantage.

Course Content

Number of Videos: 16

Number of Documents: 4

Number of Online Tests: 1

Number of Assignments: 2

Certifications

Although this course does not result in any particular certification or professional credential, it can be submitted for continuing education consideration.  Upon successful completion of the 10-question quiz, the learner may request a personalized Certificate of Completion (.PDF) documenting his or her accomplishment.

Syllabus for the Course

Section 1- Introduction and Welcome to the Course!

This section discusses the course contents, organization and expectations for successfully completing the program. It also introduces the learner to the Association of Certified Fraud Examiners (ACFE)

Section 2- Fraud Defined

This section provides the legal definition (according to U.S. law) of fraud. It also provides examples of major fraud schemes such as subpar mortgages, healthcare fraud, and insurance and insider trading frauds. The fraud triangle is introduced. The role of the Federal Bureau of Investigation (FBI) in fraud enforcement is also outlined.

Section 3- Insurance and Mass Marketing Frauds

This section continues with our examination of specific fraud types. This includes:

• Staged auto accidents

• Property insurance scams

• Mass marketing frauds

• Advance fee schemes (including the Nigerian 419 fraud)

• Recovery and impersonation strategies

• The FBI's asset foretiture and anti-money laundering programs

Section 4- Introduction to Employee Fraud

This section looks as fraud's impact on the workplace. It stresses:

• The impact of technolgy and globalization

• Fraud as an intentional act and the role of concealment

• Two primary fraud models- asset missappropriation and fraudulent finacial reporting

• Motivations and incentives for employee dishonesty

• Losses by employee groups.

Section 5- Introduction to Internal Controls

This section discusses the importance of internal controls (such as segregation of duties and documentation) The key concept: No one person should have excessive control over the organization's cash cycle. Safeguards and oversight is imperative.

Section 6- Employee Perspectives

This section stresses the importance of honest employees. It includes how dishonest staff operate and what their likely targets are. The importance of knowing your environment and the challenges to a small building are also reviewed. The dangers of "organizational intimacy" are introduced- when family and friends are placed on the payroll, there is a natural tendency to cut corners in the hiring process and the enforcement of robost internal controls.

Section 7- Fraud Hotspots

This section reviews the financial impact fraud has, as well as other negative organizational outcomes experienced by the organization. The section then identifies five of the most likely fraud hotspots in a typican business environment. These include:

• Purchasing

• Corporate credit cards

• Payroll

• Sales and accounts recievables

• Information and IT systems

Section 8- Fraud Myths

This section uncovers popular myths regarding fraud. For example:

• Well-paid employees don't commit fraud...

• Let the police handle the situation...

• Trusted employees do not commit fraud...

Section 9- Fraud Case Studies (Assignment)

This section consists of a .PDF document featuring links to actual fraud cases. The learner reads each case and should respond to the question(s) associated with each case. The eight cases cover widely diverse activities in:

• The banking industry

• A public utility

• Health care

• A police department

Section 10- Prevention: The Basics (Assignment and Lecture)

This section looks at the importance of a sound fraud prevention policy and the crucial step of effectively communicating it to staff. An assignment includes a link to a sample policy (from the ACFE). The learner is to review this model and be prepared to correctly answer the questions provided.

In addition to the above assignment, this section also features a video lecture that builds on anti-fraud techniques and preventive controls.

Section 11- Internal Controls and Policy Management

This section builds on previous material and recommends the development and benefits of using a working group to develop an anti-fraud policy. Key foundations of any successful program include:

• Hiring honest people

• Setting an ethical and open tone

• Developing a robust anti-fraud policy

• Training staff early and often in the fraud policy

• Including vendors, contractors and others in the anti-fraud effort

The section recommends the use of an Employee Assistance Program (EAP). It also discusses general safeguards for organizational checks, credit cards, and similar vulnerabilities.