1 © ArmaninoLLP | amllp.com © ArmaninoLLP | amllp.com
ArmaninoLLPWelcomes You To Today’s Webinar: Prevent Fraud in Your O...
2 © ArmaninoLLP | amllp.com
About the Presenters
Jeff Stegner, CPA/ABV, CFEPartner, Forensic & Valuation Services
Jeff ...
3 © ArmaninoLLP | amllp.com
About the Presenters
Natalie McFarlin, CPA/ABVManager, Forensic & Valuation Services
Natali...
4 © ArmaninoLLP | amllp.com
During today’s webinar, participants will:
•
Discuss the characteristics of fraud and those...
5 © ArmaninoLLP | amllp.com
Presentation Overview
Types of Fraud
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The Fraud Triangle
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Three types of fraud
Discov...
6 © ArmaninoLLP | amllp.com
•
Consequential Damages
o
Protect your job
o
Protect your co-workers
o
Protect your em...
7 © ArmaninoLLP | amllp.com
Fraud Risk Triangle
8 © ArmaninoLLP | amllp.com
•
Fraudulent Financial Reporting
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Asset Misappropriation
o
Employee steals or misuses o...
9 © ArmaninoLLP | amllp.com
Types of Fraud by Frequency
85% 37% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Asset Misappro...
10 © ArmaninoLLP | amllp.com
Type of Fraud by Median Loss
$130,000 $200,000 $1,000,000 $0$200,000$400,000$600,000$800,00...
11 © ArmaninoLLP | amllp.com
•
Profile of the average perpetrator
o
Level of authority
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Higher authority figures co...
12 © ArmaninoLLP | amllp.com
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Profile of the average perpetrator (continued)
o
Department
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A majority of fraud was...
13 © ArmaninoLLP | amllp.com
•
Behavior of the average perpetrator
o
Living beyond their means
o
Experiencing financ...
14 © ArmaninoLLP | amllp.com
•
Implement an anonymous outside fraud hotline
•
Segregation of duties
•
Job rotation
...
15 © ArmaninoLLP | amllp.com
•
Set proper “tone at the top”
•
Fraud assessments
•
Surprise audits
•
Do not rely on...
16 © ArmaninoLLP | amllp.com
•
Stated consequences of committing fraud
•
Communicate instances of discipline (no-name ...
17 © ArmaninoLLP | amllp.com
•
Tips are most common method
o
42.2% of detected fraud was from tips in 2014
o
Most co...
18 © ArmaninoLLP | amllp.com
Found How?
42%
16%
14%
7%
7%
4%
3%
3%
2%
0%
5%
10%
15%
20%
25%
30%
35%
40%...
19 © ArmaninoLLP | amllp.com
•
Most common way to detect fraud
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More effective with anonymity
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Hotlines increase l...
20 © ArmaninoLLP | amllp.com
•
Overall
o
Estimated 5% of revenue lost to fraud. This equates to $3.7 trillion internat...
21 © ArmaninoLLP | amllp.com
•
100% anonymous unless you choose otherwise
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Toll free number
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Live 24/7 coverage
•...
22 © ArmaninoLLP | amllp.com
Taking Action
23 © ArmaninoLLP | amllp.com
Taking Action
24 © ArmaninoLLP | amllp.com
Taking Action
25 © ArmaninoLLP | amllp.com
Sign up for the hotline!
•
Presentation for your Company
•
Easy to set up and go live
•...
26 © ArmaninoLLP | amllp.com
During this webinar, we’ve covered:
•
Types of fraud committed and the impact each has on ...
27 © ArmaninoLLP | amllp.com © ArmaninoLLP | amllp.com
ArmaninoLLPCertified Public Accountants & Consultants
Jeff Stegne...
of 27

Prevent Fraud in Your Organization - Webinar Slides

Published on: Mar 4, 2016
Published in: Business      
Source: www.slideshare.net


Transcripts - Prevent Fraud in Your Organization - Webinar Slides

  • 1. 1 © ArmaninoLLP | amllp.com © ArmaninoLLP | amllp.com ArmaninoLLPWelcomes You To Today’s Webinar: Prevent Fraud in Your OrganizationThe presentation will begin in a few moments Participants will receive an email within 3 business days with access to their certificate of completion.
  • 2. 2 © ArmaninoLLP | amllp.com About the Presenters Jeff Stegner, CPA/ABV, CFEPartner, Forensic & Valuation Services Jeff has nearly 25 years experience in public accounting, the last 15 of which have been focused on valuation and litigation support services. Jeff is Accredited in Business Valuation (ABV) and also a Certified Fraud Examiner (CFE). He has been qualified as the Court’s expert in various civil litigation matters on over 100 occasions and been retained in over 650 such matters including: accounting fraud, economic damages, lost profits, tracing of funds or property, spousal support, community vs. separate property claims and business valuation.
  • 3. 3 © ArmaninoLLP | amllp.com About the Presenters Natalie McFarlin, CPA/ABVManager, Forensic & Valuation Services Natalie has more than five years of experience preparing business valuations and working on hundreds of litigated matters. She is Accredited in Business Valuation (ABV) and a member of both the American Institute of Certified Public Accountants and California Society of Certified Public Accountants.
  • 4. 4 © ArmaninoLLP | amllp.com During today’s webinar, participants will: • Discuss the characteristics of fraud and those who commit fraud • Identify key prevention techniques recommended by our firm as well as the ACFE • Review case studies of actual engagements we have been involved with Learning Objectives
  • 5. 5 © ArmaninoLLP | amllp.com Presentation Overview Types of Fraud • The Fraud Triangle • Three types of fraud Discovering Fraud • Detection of Fraud • Targeted businesses • Employee red flags Prevention of Fraud • Prevention techniques • Fraud prevention checklist
  • 6. 6 © ArmaninoLLP | amllp.com • Consequential Damages o Protect your job o Protect your co-workers o Protect your employer Why Me? / Why Now?
  • 7. 7 © ArmaninoLLP | amllp.com Fraud Risk Triangle
  • 8. 8 © ArmaninoLLP | amllp.com • Fraudulent Financial Reporting • Asset Misappropriation o Employee steals or misuses organizations’ resources • Corruption o Employee misuses influence in a transaction that violates their duty • Financial Statement Fraud o Employee intentionally causes a misstatement of material information in financial reports Three Types of Fraud
  • 9. 9 © ArmaninoLLP | amllp.com Types of Fraud by Frequency 85% 37% 9% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Asset MisappropriationCorruptionFinancial Statement Fraud
  • 10. 10 © ArmaninoLLP | amllp.com Type of Fraud by Median Loss $130,000 $200,000 $1,000,000 $0$200,000$400,000$600,000$800,000$1,000,000$1,200,000Asset MisappropriationCorruptionFinancial Statement Fraud
  • 11. 11 © ArmaninoLLP | amllp.com • Profile of the average perpetrator o Level of authority • Higher authority figures commit fraud with higher median losses • Lower level employees committed fraud more frequently with lower median losses o Length of time employed • Longer employment associated with higher median losses Employee Red Flags
  • 12. 12 © ArmaninoLLP | amllp.com • Profile of the average perpetrator (continued) o Department • A majority of fraud was committed in the following departments: o Accounting o Operations o Sales o Executive/Upper Management o Customer Service o Purchasing Employee Red Flags (continued)
  • 13. 13 © ArmaninoLLP | amllp.com • Behavior of the average perpetrator o Living beyond their means o Experiencing financial difficulty o Unusually close association with vendors or customers o Excessive control issues Employee Red Flags (continued)
  • 14. 14 © ArmaninoLLP | amllp.com • Implement an anonymous outside fraud hotline • Segregation of duties • Job rotation • Management review Prevention Techniques
  • 15. 15 © ArmaninoLLP | amllp.com • Set proper “tone at the top” • Fraud assessments • Surprise audits • Do not rely on external audits as a primary detection method • Implement fraud awareness training for all Prevention Techniques(continued)
  • 16. 16 © ArmaninoLLP | amllp.com • Stated consequences of committing fraud • Communicate instances of discipline (no-name basis) • Effective deterrent • Enforce environment of high ethical standards Communicate Highly Ethical Culture
  • 17. 17 © ArmaninoLLP | amllp.com • Tips are most common method o 42.2% of detected fraud was from tips in 2014 o Most common method since 2002 • Management review and internal audit are the next two most common methods o Combined these make up 30.1% o A slight increase from 29.0% in 2012 • External audit is far less effective o Only discovers 3.0% of fraud cases Detection of Fraud
  • 18. 18 © ArmaninoLLP | amllp.com Found How? 42% 16% 14% 7% 7% 4% 3% 3% 2% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Tips Management review Internal Audit By Accident Account Reconciliation Document Examination External Audit Surveillance/Monitoring Notified by Law Enforcement IT Controls Confession Other
  • 19. 19 © ArmaninoLLP | amllp.com • Most common way to detect fraud • More effective with anonymity • Hotlines increase likelihood of receiving tips Fraud Detected by Tips
  • 20. 20 © ArmaninoLLP | amllp.com • Overall o Estimated 5% of revenue lost to fraud. This equates to $3.7 trillion internationally per year. o Same report -median loss per fraud occurrence investigated by its members was $145,000 (over 1/5 exceeded $1,000,000). • Organizations with Hotlines: o Frauds were 41% less costly o Frauds were detected 50% more quickly The Facts
  • 21. 21 © ArmaninoLLP | amllp.com • 100% anonymous unless you choose otherwise • Toll free number • Live 24/7 coverage • Immediate reporting Key benefits: • #1 way to detect fraud -communications • #1 way to prevent fraud –strong tone at the top • Reduces damages from fraud by 60%. Taking Action www.RedFlagReporting.com 1-877-64-RedFlag (1-877-647-3335)
  • 22. 22 © ArmaninoLLP | amllp.com Taking Action
  • 23. 23 © ArmaninoLLP | amllp.com Taking Action
  • 24. 24 © ArmaninoLLP | amllp.com Taking Action
  • 25. 25 © ArmaninoLLP | amllp.com Sign up for the hotline! • Presentation for your Company • Easy to set up and go live • Inexpensive o $1,500 annually (one time $1,500 set up fee) Now What?
  • 26. 26 © ArmaninoLLP | amllp.com During this webinar, we’ve covered: • Types of fraud committed and the impact each has on an organization • The common signs of fraud and the individuals who commit it • How to be an organization that prevents fraud In Conclusion…
  • 27. 27 © ArmaninoLLP | amllp.com © ArmaninoLLP | amllp.com ArmaninoLLPCertified Public Accountants & Consultants Jeff Stegner phone: 925.790.2692 email: Jeff.Stegner@amllp.com Natalie McFarlinphone: 925.790.2885 email: Natalie.McFarlin@amllp.com Participants will receive an email within 3 business days with access to their certificate of completion.

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