© Boardworks Ltd 20081 of 14

Break-Even Analysis – Unit 3: Investigating Financial Control

3.4 Recording Financial Transactions

Unit 3: Investigating Financial Control

© Boardworks Ltd 20081 of 14

© Boardworks Ltd 20082 of 14

Contents

© Boardworks Ltd 20082 of 14

Teacher’s notes included in the Notes Page

Flash activity (these activities are not editable) Web addresses

Printable activity

Key skills

For more detailed instructions, see the Getting Started presentation

© Boardworks Ltd 20083 of 14

Fraud

In this section, you will look at different types of fraud that can occur in business situations:

Different types of fraud

Fraud prevention

Fraud management and control

© Boardworks Ltd 20083 of 14

© Boardworks Ltd 20084 of 14

What is fraud?

Fraud happens when goods, services or money are obtained by deception.

Fraud costs British businesses a huge amount of money.

Who do you think commits fraud, and how do they do it? Discuss your ideas as a class.

…which means businesses are less able to re-invest in themselves.

This drives profits down…

Loss of profits also means staff rewards, such as bonuses, are affected.

© Boardworks Ltd 20085 of 14

Who commits fraud?

Fraud can be carried out by customers, staff or complete strangers. It might involve a few pounds, or a few billion!

Which of these activities is fraudulent?

They all are!

Using your work phone for personal calls (when against company policy)?

Applying for credit cards

using someone else’s identity?

Stealing from petty cash at work?

© Boardworks Ltd 20086 of 14

Spot the fraudster!

© Boardworks Ltd 20087 of 14

Embezzlement

Embezzlement is another type of fraud.

Someone who is guilty of embezzlement will illegally use money or assets that have been entrusted to them, even though they actually belong to somebody else.

If an employee is embezzling money from their place of work, they may forge records or falsify business accounts in order to cover their tracks.

Incidences of embezzlement are particularly common in large business organizations.

Can you suggest why this might be?

© Boardworks Ltd 20088 of 14

Fraud prevention measures

© Boardworks Ltd 20089 of 14

Case study: chip and PIN

Card fraud is a real problem in the UK. In 2007 alone, card fraud losses on UK-issued cards exceeded £535 million.

One recent measure to reduce certain types of card fraud has been the introduction of chip and PIN, where customers enter a unique PIN number to pay for goods, rather than signing a receipt.

losses on UK high street transactions have fallen by 67%.

fraud on lost/stolen cards is at its lowest level for 10 years;

UK cash machine fraud and domestic counterfeit card fraud have decreased significantly;

Since the implementation of chip and PIN:

Investigate further the effect of chip and PIN technology on card fraud.

© Boardworks Ltd 200810 of 14

Managing information and controlling fraud

The type of fraud a business is most vulnerable to depends on its main business purpose.

An online store would be very concerned about Internet fraud.

A high street shop would be very concerned about preventing stock and money from the till being taken.

In order to control fraud, managers must identify the specific needs of their

organization and take appropriate action.

What sort of fraud would an online store be concerned about?

What sort of fraud would a high street shop be concerned about?

© Boardworks Ltd 200811 of 14

Controlling fraud

© Boardworks Ltd 200812 of 14

Assignment:

© Boardworks Ltd 200812 of 14

© Boardworks Ltd 200813 of 14

Build the business!

© Boardworks Ltd 200814 of 14

Glossary