Adelphia Fraud
1.)Essentials of Committing Fraud:
Position Equals Power The amount of money lost to an internal corporate fraud is most significantly influenced by the perpetrator’s position in the organization. When we look at various characteristics of those committing fraud, this makes sense, because access creates opportunity. Typically, the higher a person moves in a company, the greater access she or he is granted to information, assets, data, and people. That creates more opportunities to commit fraud.
Men and women commit a fairly equal number of frauds at work. The most recent ACFE survey indicated that 61% of fraud schemes were perpetrated by men, while 39% were committed by women.19 The 2004 ACFE survey put the differential at 53% committed by men and 47% committed by women,20 while the 2002 survey cited that internal fraud were committed 54% by men and 47% by women.21 These differences are not terribly significant. Overall, the consensus is that men and women participate in a fairly equal number of fraud schemes.
Personal Red Flags of Fraud: Lifestyle Issues
•Noticeable change in lifestyle or obvious wealth
•Longstanding financial difficulties, including high debts and other financial obligations like child support and alimony
•Spending beyond their means
Personal Red Flags of Fraud: Other Issues
•Persistent personal problems - legal problems, interpersonal issues, addiction, criminal history, infidelity
•Problematic attitudes at work - weak code of ethics, attempts to beat the system
•Questionable work habits - poor performance, shirking responsibility, overly protective of job duties and documentation, chronic dissatisfaction, attempts to be alone (first one in, last one out), never takes a vacation, manager doing subordinate level work
Financial Statement Fraud:
Financial statement fraud is the most costly type of fraud committed at companies. Although financial statement fraud is present in only about 10% of internal fraud cases, the median cost of
Position Equals Power The amount of money lost to an internal corporate fraud is most significantly influenced by the perpetrator’s position in the organization. When we look at various characteristics of those committing fraud, this makes sense, because access creates opportunity. Typically, the higher a person moves in a company, the greater access she or he is granted to information, assets, data, and people. That creates more opportunities to commit fraud.
Men and women commit a fairly equal number of frauds at work. The most recent ACFE survey indicated that 61% of fraud schemes were perpetrated by men, while 39% were committed by women.19 The 2004 ACFE survey put the differential at 53% committed by men and 47% committed by women,20 while the 2002 survey cited that internal fraud were committed 54% by men and 47% by women.21 These differences are not terribly significant. Overall, the consensus is that men and women participate in a fairly equal number of fraud schemes.
Personal Red Flags of Fraud: Lifestyle Issues
•Noticeable change in lifestyle or obvious wealth
•Longstanding financial difficulties, including high debts and other financial obligations like child support and alimony
•Spending beyond their means
Personal Red Flags of Fraud: Other Issues
•Persistent personal problems - legal problems, interpersonal issues, addiction, criminal history, infidelity
•Problematic attitudes at work - weak code of ethics, attempts to beat the system
•Questionable work habits - poor performance, shirking responsibility, overly protective of job duties and documentation, chronic dissatisfaction, attempts to be alone (first one in, last one out), never takes a vacation, manager doing subordinate level work
Financial Statement Fraud:
Financial statement fraud is the most costly type of fraud committed at companies. Although financial statement fraud is present in only about 10% of internal fraud cases, the median cost of