CHAPTER1 Fraud Definitions, Models, and Taxonomies 1
Introduction 1
Classic Fraud Research 6
Fraud Triangle 8
Scope of Fraud 12
Profile of Fraudsters 14
Who Is Victimized by Fraud Most Often? 18
Fraud Taxonomies 19
Evolution of a Typical Fraud 28
Chaptar2 Fundamentals of Fraud Audlting and Forensic Accounting 33
Introduction 33
Brief History of Fraud and the Antifraud Profession 35
Review of Technical Literature 40
Auditor's Mind-Set 42
What Is Forensic Accounting? 43
Steps in Fraud Investigation 52
What Is Fraud Auditing? 55
Antifraud Professional Organizations and Certifications 71
Summary 72
CHAPTER3 Auditor Liability for Dotecting Fraud 75
Introduction 75
Recent Developments in Auditor Liability 91
Summary 96
CHAPTER4 Fraud Schemes 99
Introduction 99
ACFE Fraud Tree 101
Financial Statement Schemes 108
Corruption Schemes 111
Asset Misappropriation Schemes 113
Summary 122
CHAPTER5 Red Flags and Fraud Detection 125
Introduction 125
Professional Standards 126
Common Red Flags 127
Common Detection Methods 129
Specific Red Flags and Detection Methods 131
Corruption Schemes 134
Asset Misappropriation Schemes 135
Fraud Detection Model 147
Summary 153
CHAPTER6 Fraud and CAATs 155
Introduction 155
Benefits of CAATs 156
Fraud and CAAT Issues 158
Need for Computer Tools 159
Sample Tools/CAATs 161
CAAT Methodology 164
Summary 173
CHAPTER7 Fraud Prevention and Control 175
Introduction 175
Perception of Detection 175
Classic Approaches 178
Prevention Environment 180
Prevention Measures 183
Accounting Cycles 187
Summary 190
CHAPTER8 Fraud Risk Assessment 191
Introduction 191
Risk Assessment Process and Documentation 196
Risk Management Checklists and Documentation 198
Special Cases 207
Summary 209
CHAPTER9 Fraud and the Accounting Information System 211
Introduction 211
Accounting Concepts 212
Expenditures Cycle (Purchases and Disbursements) 213
Bank Reconciliation 214
General Ledger 215
Cash Path 218
Segregation of Duties 218
Computerized Accounting Systems 218
Key Personnel 219
Computer Hardware 224
Computer Software 226
Media Storage 227
New Forms of Media 228
Paper and Microfilm 229
Audit Trail Concept 229
CHAPTER10 Computer-Related Fraud 231
Introduction 231
History and Evolution of Computer-Related Crimes 233
Computer-Related Fraud Theories and Principles 236
Characteristics of the Computer Environment 240
Information Security (InfoSec) 242
Profiling Internet Fraudsters 245
Summary 252
CHAPTER11 Forensic Accountant as an Expert Witness 255
Introduction 255
Role of a Forensic Accountant as a Witness in Court 255
Forensic Accountant as an Expert Witness 262
Qualification and Admissibility of Accounting Evidence 265
Expert's Role in the Litigation Team 267
Pretestimony Activities 267
Trial and Testimony 269
Summary 279
Appendix 11A 279
CHAPTER12 General Criteria and Standards for Evaluating an Expert'g Qualifications 283
Introduction 283
Credentials 283
Personal Qualities of the Expert 290
Sources for Locating Expert Witnesses 294
Distinguishing the Actual Area of Competence 296
Summary 297
CHAPTER13 Gatherlng Evldence 299
Introduction 299
Rules of Evidence 299
Hearsay Exceptions 303
Other Rules of Evidence 304
Index 315