17
Thomas G. Keeton Patricia L. Keeton
Thomas G. Keeton
Patricia L. Keeton
Define Fraud
Identify Fraud Characteristics
Tone at the Top & Easy Cheats
Risk Assessment Tools
The Next Step
A material false statement
Knowledge that the statement was false when it was uttered
Reliance on the false statement by the victim
Damages resulting from the victim’s reliance on the false statement
3
4
Opportunity
Pressure Rationalization
Global survey
Measuring the costs of occupational fraud
5 percent lost to fraud
$3.5 trillion worldwide
5
6
3.2%
17.6%
37.5%
41.6%
0% 10% 20% 30% 40% 50%
Other
Owner/Executive
Manager
Employee
Percent of Cases
Posi
tion
of
Per
pet
rato
r
7
$100,000
$573,000
$182,000
$60,000
$0 $200,000 $400,000 $600,000
Other
Owner/Executive
Manager
Employee
Median Loss
Posi
tion
of
Per
pet
rato
r
8
Female
35.0%
Male
65.0%
9
1.2%
5.6%
5.9%
87.3%
Other
Had prior convictions
Charged but not convicted
Never charged or convicted
0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Per
pet
rato
r’s
Cri
min
al
His
tory
Percent of Cases
10
1.1%
1.1%
1.5%
1.9%
3.0%
3.3%
4.1%
4.8%
7.0%
14.4%
14.6%
43.3%
0% 10% 20% 30% 40% 50%
Other
IT Controls
Confession
Surveillance/Monitoring
Notified by Police
External Audit
Document Examination
Account Reconciliation
By Accident
Internal Audit
Management Review
Tip
Percent of Cases
Det
ecti
on
Met
ho
d
Skimming
Larceny
Expense Reports
Procurement
Ghosts
Vehicles
Conflict of Interest
Life Style
Crisis
Little time off
Tone at the top
AIS review
Hot line
Make an example
Develop a plan & monitor
Benefits
Who
Tolerance & Policy
Process Controls
Environment Controls
Proactive Detection
ACFE.com
Wells, JT. 2014. Principles of Fraud Examination. Wiley.
ACFE. 2014. Report to the Nations- on Occupational Fraud and Abuse.
Albrecht, WS. 2012. Fraud Examination. Cengage.
Dr. Patricia L. KeetonFour K [email protected]
Dr. Thomas G. Keeton, CPA, CFEFour K [email protected]
