The Predator Fraudster

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Do curso por West Virginia University

Forensic Accounting and Fraud Examination

1095 classificações

West Virginia University

Forensic Accounting and Fraud Examination

1095 classificações

Everyday across the world, thousands of businesses are victimized by fraud. Who commits these bad acts? Why? And, how? In this course we are going to help you answer the questions: who commits fraud, why and how. We’ll also help you develop skills for catching them.

Na lição

The Predator Fraudster

What is a "preditor" fraudster? How do you protect your organization against a preditor fraudster? Learn how internal control concepts and other techniques can help you detect and prevent preditor fraudsters.

The Predator Fraudster3:52

Attributes of a Predator9:37

Internal Control Concepts10:02

How to Detect and Prevent Financial Statement Fraud - Crazy Eddie12:05

Conheça os instrutores

Dr. Richard Riley, Ph.D
Louis F. Tanner Distinguished Professor of Public Accounting
Accounting
Dr. Richard Dull, Ph.D
GoMart Professor in Accounting Information Systems
Accounting
John Gill, J.D., CFE
Vice President - Education
Association of Certified Fraud Examiners

John Gill, Esq: As discussed in other segments of this course,

ordinary people can sometimes find themselves in extraordinary

circumstances and do things they might never think themselves

capable of doing.

These are generally honest people who commit fraud because

they have a financial need.

There is another category of fraud perpetrator that is more

cunning.

These are people who steal, not because they need the money, but

because they think they can get away with it.

These people are predators.

They don't commit fraud because the opportunity suddenly drops

in their lap.

They are on the hunt looking for any weakens in an organization

that could lead to a dishonest payday.

This segment will discuss how to design your anti fraud efforts

around this type of fraudster.

The classic model for understanding why people commit

fraud is what is now referred to as the faud triangle.

It is based on research by Dr. Donald Cressey in the 1950s.

Cressey attempted to explain why seemingly honest, trusted

individuals would steal from their employers.

In the cases Cressey studied, he found that for a large number of

people, they commit fraud because they have a financial

need.

They are under financial pressure.

Second, they see a way to relieve the pressure through

fraud.

This is perceived opportunity.

If I steal these funds, I can keep my home, for example.

And finally, because these individuals are normally law

abiding citizens they feel the need to rationalize their

conduct.

They have the need to justify their behavior so they don't

feel bad about themselves.

For example, some may say that they will pay the money back or

that they deserve it.

But the fraud triangle doesn't attempt to explain all

categories of fraud perpetrators.

There are some individuals who are actively looking to commit

fraud.

These are predators.

Unlike the accidental fraudster who needs money and sees the

opportunity to relieve it, the predator slinking through the

organization looking for weaknesses and vulnerabilities.

He has no need to rationalize his actions.

He simply wants the money any way he can get it.

Research has shown that sometimes accidental fraudsters

can turn into predators.

Occasionally the fraudster who first steals to relieve

financial pressure can then become addicted to the lifestyle

and extra money.

At that point, the accidental fraudster can turn into a

predator.

ACFE's report to the nation's survey has shown repeatedly that

very few frauds occur within the first year of the perpetrators

employment.

This means that predatory fraudsters can be patient.

Large frauds can't be accomplished right after a

person is hired.

It may take time to move to a point within the company where

the fraudster has sufficient trust and organizational

opportunity to steal.

Anyone can potentially be a fraudster, even your most long

serving and trusted employees.

In designing anti fraud controls, the traditional fraud

triangle must be modified.

Since predators don't commit fraud because of need, this

element is no longer important.

Likewise, since these individuals aren't trying to

justify their actions to themselves, there's no need to

come up with elaborate excuses or rationalizations for their

conduct.

The only element left is opportunity.

Predators spend their time and energy looking for opportunities 76 00:03:46,333 to commit fraud.

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