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Definition
| The totality of circumstances that would lead a reasonable, professionally trained, and prudent individual to believe a fraud has occurred, is occurring, and/or will occur. |
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Definition
| A process of resolving allegations of fraud from inception to disposition. |
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| The methodology used to investigate allegations of fraud |
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| Occupational fraud and abuse |
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Definition
| The use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization's resources or assets |
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Definition
| Any crime for gain that uses deception as its principal modus operandi |
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Definition
| Petty crimes committed against organizations, such as excessive lunch hours or breaks, coming to work late or leaving early, using sick time when not sick, and pilfering supplies or products |
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Definition
| In business, it is the trusting relationship that the employee is expected to hold toward the employer, requiring the employee's scrupulous good faith to act in the employer's best interests |
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Definition
| The unauthorized assumption of a right of ownership over the goods of another to the exclusion of the owner's rights. |
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Definition
| The unlawful taking and carrying away of property of another with the intent to convert it to one's own use |
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Definition
| A model developed to explain the research of Cressey, who noted that most occupational frauds were caused by a combination of three elements: non-shareable financial problems, perceived opportunity, and the ability to rationalize conduct |
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Definition
| Financial difficulties that would be hard for a potential occupational offender to disclose to outsiders, such as excessive debt, gambling, drug use, business reversals, or extramarital affairs |
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Definition
| Conduct by employees that is detrimental to both employer and employee, such as goldbricking, work slowdowns, and industrial sabotage |
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Term
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Definition
| Deterrence mechanisms used by organizations to discourage employee deviance and fraud, which include company policy, selection of personnel, inventory control, security, and punishment |
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Definition
| Informal deterrence mechanisms that help discourage employee deviance and fraud, such as loss of prestige and embarrassment to friends and family |
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Term
| Third step of the Fraud Theory Approach |
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Definition
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Term
| First step of the Fraud Theory Approach |
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Definition
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| Second step of the Fraud Theory Approach |
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Definition
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| Fourth step of the Fraud Theory Approach |
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Definition
| Refine and amend the hypothesis |
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Term
1) Analyze available data
2) Create a hypothesis
3) Test the hypothesis
4) Refine and amend the hypothesis |
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Definition
| What are the four steps of the Fraud Theory Approach? |
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Term
1) A material false statement
2) Knowledge that the statement was false when it was uttered
3) Reliance on the false statement by the victim (company)
4) Damages resulting from the victim's reliance on the false statement |
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Definition
| What are the four general elements that must be present for a fraud to exist? |
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Term
1) There was a taking or carrying away
2) Of the money or property of another
3) Without the consent of the owner
4) and With the intent to deprive the owner of its use or possession |
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Definition
| What four elements must take place to prove that a person has committed larceny? |
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Term
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Definition
| To willfully take, or convert to one's use, another's money or property of which the wrongdoer acquired possession lawfully, by reason of some office or employment or position of trust |
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Term
1) Violation of ascribed obligations
2) Problems resulting from personal failure
3) Business reversals
4) Physical isolation
5) Status gaining
6) Employer-Employee relations |
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Definition
| Name three of the six basic categories of situations that resulted in a non-shareable problem |
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Term
1) Acts by employees against property
2) Violations of the norms regulating acceptable levels of production |
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Definition
| What are the two basic categories of employee deviant behavior? |
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Term
1) Company policy
2) Selection of personnel
3) Inventory control
4) Security
5) Punishment |
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Definition
| Hollinger and Clark examined five different control mechanisms. What were they? |
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Term
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Definition
| External pressures that are applied through both positive and negative sanctions |
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Term
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Definition
| Internalization by the employee of the group norms of the organization |
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Term
1) Asset misappropriation
2) Corruption
3) Fraudulent statements |
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Definition
| According to the fraud tree, there are three major categories of occupational fraud. What are they? |
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Term
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Definition
| The theft or misuse of an organization's assets |
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Term
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Definition
| Occurs when fraudsters wrongfully use their influence in a business transaction in order to procure some benefit for themselves or another person, contrary to their duty to their employer or the rights of another |
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Term
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Definition
| Involves purposeful misreporting of financial information in order to procure some benefit for themselves or another person, contrary to their duty to their employer or the rights of another |
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Term
1) A material false statement
2) Knowledge that the statement was false when it was uttered
3) Reliance on the false statement by the victim
4) Damages resulting from the victim’s reliance on the false statement |
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Definition
| Under common law, what are the four general elements that must be present for a fraud to exist? |
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Term
1) The activity is clandestine
2) The activity violates the employee’s fiduciary duties to the organization
3) The activity is committed for the purpose of direct or indirect financial benefit to the employee
4) The activity costs the employing organization assets, revenues, or reserves |
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Definition
| Occupational Fraud and Abuse is defined by what four elements? |
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