Standard Fraud Risk Assessment Question:“If someone did want to commit fraud, and not be caught, how would they do it?”
One challenge for fraud specialists is getting clients to address the real risk of fraud faced by their organizations (internal or external). For this assignment, you are to set aside your otherwise ethical nature and plan, speculate, or otherwise describe, in reasonable detail, how you, or someone else you know, would go about successfully committing a fraud. This fraud is of your choice, but should fall into one of the categories we are discussing (e.g. asset misappropriation, financial reporting, corruption, cybercrime, etc.) This may be a first person account (i.e. a fraud I could commit) or a fraud you believe someone else could commit. However, it must be based on facts and factors that you are aware of personally. The act may be intended to benefit the fraudster individually, or their organization.
You will discuss how the fraud would occur, what the target of the fraud is (i.e., what would be taken or manipulated), how it would benefit the fraudster(s) (e.g. how converted to cash, etc.) and how it would be disguised or concealed. You should also include discussions of any relevant controls, including any that may need to be bypassed or are not operating effectively. In preparing this assignment, I want to you draw on some of the lessons you have learned in this class or other classes related to issues of fraud. For example, you should describe any relevant fraud risk factors. Note: if you are doing a first person account, you are not required to disclose any highly personal pressures or rationalizations (other than – “it’s required for my grade” or “my professor made me do it”).
In the interests of catharsis and a civil society – I want you to conclude by discussing (briefly) any preventive or detective controls could be put into place to address your scheme.
The format of the paper should be between 5 – 10 pages (double spaced) of narrative. If needed, you may include (but are not required to) additional references such as diagrams, tables, data, maps, locations, and organization charts as an appendix. Avoid putting any substantive content in the appendixes.
Some comments/considerations on this assignment: - In my experience, people are hesitant to consider fraud from their own perspective or that of colleagues. However, a robust consideration of fraud requires a critical look at where real frauds might occur. People on the “inside” or with particular experience are in the best position to surface these issues and vulnerabilities.
- This is not a case study of a past fraud. I don’t want you to describe a fraud that has occurred. I want you to look at the facts known to you and think up a future fraud.
- No citations or references are required.
- You may base this on your experience at a current or former employer, but please change the names of ?entities or persons involved.
- Do not resort to “capers” or outright criminal enterprises – i.e. armed robberies, bank heists, hostage taking, James Bond or Mission Impossible type plots, etc. I’m looking at more subtle frauds – ones that could really occur and be concealed. That said, misappropriation of assets (e.g. cash, inventory, etc.) is fair game.