Forensic Accounting & Fraud Investigation

Forensic Accounting & Fraud Investigation

1. DISCOVER . LEARN . EMPOWER INSTITUTE: USB DEPARTMENT: COMMERCE Bachelor of Commerce Subject Name : FUNDAMENTALS OF FORENSIC ACCOUNTING AND FRAUD INVESTIGATION Subject Code: 22CMT-279 By- Dr. Sumesh S P 1

2. 2 FUNDAMENTALS OF FORENSIC ACCOUNTING AND FRAUD INVESTIGATION Course Outcomes CO1 The students would be able to Understand both the pervasiveness and the causes of fraud and white-collar crime in our society. CO2 The students would be able to Apply the methods available to determine commercial or economic damages. CO3 The students would be able to Analyze the types of fraud and fraud schemes that affect business enterprises. CO4 The students would be able to Evaluate the methods of fraud detection and prevention and increase their ability to recognize potential fraudulent situations. CO5 The students would be able to Develop resolutions of case studies related to problems faced by the business due to fraud and fraud schemes.

3. 3 Definition of Skimming: Explain the essence of skimming as the direct theft of cash or digital funds before they are recorded in the official financial system. Cash Skimming: Pocketing cash payments without recording sales Under-ringing (underreporting actual sale amounts) Falsifying voids or refunds Receivables Skimming: Stealing checks or diverting customer payments Lapping (lapping invoices with partial payments) Inventory Skimming: Short-selling inventory and pocketing the difference Fake returns or write-offs Card Skimming: Data skimming at POS terminals Installing skimmers on ATMs or gas pumps Phishing emails requesting credit card information Types of Skimming:

4. Red Flags for Skimming Activity Financial Discrepancies: Unexplained declines in revenue or inventory levels Inconsistencies between cash receipts and recorded sales High number of voided transactions or returns Unusual customer payment patterns Behavioral Red Flags: Excessive overtime or cash handling by specific employees Change in lifestyle not consistent with income Unexplained pressure on or conflicts between employees Lack of internal controls or poor record-keeping . 4

5. Forensic Accounting Techniques: Ratio analysis to identify unusual trends Transaction testing to verify legitimacy of sales and payments Data analytics to detect anomalies and patterns Internal controls review to identify weaknesses Fraud Detection Tools: Automated transaction monitoring systems Positive pay controls for check payments Inventory control systems with barcode tracking Employee background checks and training programs 5 Tools & Techniques for Detecting Skimming

6. Prevention & Conclusion Preventive Measures: Strong internal controls and segregation of duties Regular reconciliations and audits Employee training on ethics and fraud awareness Implementing technology solutions for fraud detection Open communication and reporting culture Conclusion: Reiterate the importance of vigilance and proactive measures Encourage attendees to seek expert advice if needed Call to action: implement anti-skimming strategies and protect your business 6

7. Reference Book Forensic Accounting And Fraud Investigation For Non-experts, by  Howard Silverstone  (Author),  Michael Sheetz  (Author),  Stephen Pedneault  (Author),  Frank Rudewicz  (Author) , Third edition , Publisher-Wiley Forensic Accounting and Financial Statement Fraud, Volume II: Forensic Accounting Performance, by  Zabihollah Rezaee  (Author), Business Expert Press 7

8. THANK YOU For queries: Email: [email protected] 8