CFCI Study Guide 2024

CFCI Study Guide 2024 Fraud "Any illegal acts characterized by deceit, concealment, or violation of trust. These acts are not dependent upon the perpetrated by individuals and organizations to obtain money, property, or services; to avoid payment or loss of services; or to secure personal or business ad-vantage." Main types of fraud Internal Fraud Internal Fraud and External Fraud which involves the employees of the company against which the fraud is perpetrated External Fraud deceptive conduct by non-employees that deprives the organization of value, and/or is undertaken for financial gain. embezzlement employer. f inancial fraud theft or misappropriation of funds placed in one's trust or belonging to one's "cooking the books." This type of fraud generally refers to falsely representing the financial condition of the company, so as to inflate the value of stock, fraudulently boost executive bonuses, or otherwise mislead shareholders, lenders, employees, investment analysts, or other users of the information. Skimming (cash larceny) Accounts receivable fraud, this involves simply stealing cash before it enters the organization's accounting system. Billing Schemes Perpetrated by employees who cause their employer to issue a payment to a false supplier by submitting invoices for fictitious goods or services, inflated invoices, or invoices for personal purchases. check tampering password to taking advantage of employee access to blank company checks, using a steal computer-generated checks, or producing counterfeit checks. Employee reimbursement scheme making false claims for reimbursement, or inflating or creating f ictitious business expenses. (Travel /meal reimbursement. corruption bribery Bribery, illegal gratuities, and/or extortion. when something of value is offered or given to influence a business decision Illegal Gratuities Extortion when something of value is given to an employee to reward a business decision. when a person demands payment or seeks to influence a business decision by threat of harm through loss of business or personal injury. Kickback Schemes involving employees and vendors, often using inflated billing or invoices for which the employee is paid a portion of the inflated or fictitious invoice. credit card fraud or debit card. C.N.P the creation, sale, or use of a counterfeit credit card, or the use of a stolen credit Card not present transactions identity fraud involves the unauthorized use of another person's personal data for illegal financial benefit. Involves abusing the stolen information to transact personal business in the victim's name. identity theft the fraudulent acquisition or stealing of confidential personal information. 2 categories that encompass Fraud Theft (stealing money, ID, or assests) and deception (cooking the books, lying to shareholders, employees or partners) Myth #1 of the Financial Services Myth #2 of Financial Services "We have very little fraud here" ex: subprime mortgage fraud "Ethics and training compliance has us covered" Fraud is not always