CFCI Study Guide – Updated with Certified Solutions

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 advantage." Main types of fraud Internal Fraud and External Fraud Internal Fraud Activities that may be criminal, committed within an organization, typically by the employee against the employer. External Fraud Deceptive conduct by non-employees that deprives the organization of value, and/or is undertaken for financial gain. Embezzlement The theft of money, property, or other assets of the employer.Larceny The taking away of the property of another, with the intent to convert it to his/her own use. Financial Fraud "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 Using false documentation to cause a targeted organization to issue a payment for false services and/or purchases. Check Tampering Common method (Taking advantage of employee access to blank company checks, using a password to steal computer-generated checks or producing