Fraud Examination Chapter 1 The Nature of Fraud

Fraud Examination Chapter 1 The Nature of Fraud Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

To the Student q With this chapter, you are embarking on an exciting journey of the study of fraud. Many of you will find this course more interesting than any other course you have taken before. q Chapter 1 will provide an overview of fraud—what is fraud, how serious is the problem, fraud-fighting careers, criminal and civil laws, and other overview topics. Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

Learning Objectives q Recognize the seriousness and effects of fraud q Define fraud q Classify types of fraud q Distinguish between criminal and civil fraud laws q Identify fraud-fighting careers Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

The Seriousness of Fraud Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

The Seriousness of Fraud Sources of Fraud Statistics § § § Government Agencies Researchers Insurance Companies Fraud Victims Association of Certified Fraud Examiners (ACFE) Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

The Definition of Fraud q Seven Specific Parts of Fraud § § § § A representation… About a material point, Which is false, And intentionally or recklessly so, Which is believed And acted upon by the victim To the victim’s damage Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

The Definition of Fraud q Fraud is… q intentional q to trick or deceive someone out of his/her assets q theft q a crime q Fraud is not… q taken by physical force q a mistake or error q victimless q insignificant because no one is hurt q acceptable or justifiable Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

The Various Classifications of Fraud q There are many ways to classify the various types of fraud, the most common way is to simply divide frauds into those that are committed against organizations and those that are committed on behalf of organizations q Employee fraud q Occupational fraud q A third classification divides frauds according to victims Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

The Various Classifications of Fraud Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

Criminal and Civil Fraud Laws q When people commit fraud, they can be prosecuted criminally and/or civilly. q Criminal law is that branch of law that deals with offenses of a public nature q Civil law deals with the rights of individuals Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license

Fraud-fighting Careers Albrecht, Zimbelman © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license