Fraud ExaminationIntroductionThere are varied types of fraud under criminal and civil law such as tax fraud, false billing, false advertising, currency counterfeiting, forgery, health fraud, bank fraud, impersonation, insurance fraud, securities fraud and investment frauds among others as highlighted by Cohen (2005). Just as there are varied reasons why people commit fraud, there are strategies and mechanisms that can effectively be used to minimize or more importantly help prevent fraud. Samocuik et al. (2010) defines fraud as the deliberate deception done for personal interests and harms another person in the process.
Fraud is considered criminal and also a violation of civil law. This forms the basis of this report, which seeks to answer questions based on case studies dealing fraud. Case Study 1 from Chapter 1 of the text (Abrecht et al. , 2012, pp. 25-27)Among clues that caused Jane to suspect that fraud was involved is the inconsistency in the process of endorsing checks where some of the accounts payable checks did not have complete endorsement by the payees (Albrecht, et al. , 2011). Although in some circumstances and in some organizations, there are tendencies for less-than-perfect endorsements for accounts payable checks.
Jane could not be sure if it was such a case or if it was a serious case of fraud since the said payable checks were payable to dual payees, which required an endorsement of each payee, which was lacking and therefore she decided to post an audit comment about the same (Albrecht, et al. , 2011). As highlighted by Albrecht et al. (2011), upon review with Gus Jackson, among other initial clues that suggested to Jane something was not right was when they discovered that all the endorsement in all the payable checks had similar handwriting despite the fact that the names were different.
The other clue and suspicion was the fact that the paid checks were approved as rush payments. Additional clues were the lack of supporting documents for the payments. When Jane decided to find other payments made to the same payees, the endorsement to the paid checks were totally different from the suspicious checks, which meant the endorsement for the checks were made by two different people (Albrecht, et al. , 2011).
In addition, the signatures for the paid checks that had supporting documents matched signatures on file for the payees, which would indicate forgery of signature, which would suggest fraudulent activities in relation to the suspicious endorsements. It is important for fraud examiners to follow up on even the smallest inconsistencies since any form of inconsistency no matter how insignificant it may seem may be viewed as a red flag to fraud. Following even on the smallest inconsistencies is crucial since one can never know where the inconsistencies may lead to and therefore it is better to be sure about the inconsistency than to ignore it and be sorry about it later on (Hall, 2010).
(Singleton & Singleton, 2010) defines inconsistencies as a set of events or situations, which are unusual or atypical in nature, and they deviate from the normal processes and activities. Inconsistencies signify that things are out of ordinary and may therefore require further examination.