Fundamentals of Fraud Detection and Prevention

📋 Course Outline

1. Definition and essential elements of fraud
2. Ponzi pyramid scheme and its characteristics
3. Classification of fraud by victim type including occupational, customer, management, investment scams, and miscellaneous fraud
4. Fraud examination and forensic accounting roles
5. The Fraud Triangle: pressure, opportunity, and rationalization
6. Organizational measures to eliminate fraud pressures, rationalization, and opportunities including internal controls and employee assistance programs
7. Money laundering stages, schemes, and detection methods
8. Combatting money laundering: government measures and red flags
9. Analytical techniques for fraud detection including Benford’s Law and ratio analysis

📖 1. Definition and essential elements of fraud

🔑 Key Concepts & Definitions

• FRAUD: A form of theft involving deception and confidence to illegally obtain something that belongs to others, distinct from robbery which involves physical force.
• Material false statement: A false statement that is intentionally false and significant enough to influence the victim's reliance, leading to damages.
• ASSET: 2 pcp methods of getting something from others illegally: - Physically force someone to give you what we want (violence, gun…) = ROBERY - You trick them out of their assets = FRAUD Robbery is generally more violent and traumatic, it usually attracts much more media attention, but losses from fraud far exceed in losses.