Flashcards: Fundamentals of Fraud Detection and Prevention — 18 cards

Fraud — definition?

Deception to illegally obtain assets.

Material false statement — role?

Influences victim reliance and causes damages.

Asset — method?

Trickery or force to obtain assets.

Ponzi scheme — characteristic?

Pays returns using new investors' money.

Pyramid scheme — difference?

Profits from recruiting, not legitimate business.

Victim type — occupational?

Targets employees or vendors within organizations.

Customer fraud — example?

Deceiving organizations to get goods without payment.

Management fraud — focus?

Manipulating financial statements to deceive shareholders.

Fraud examination — purpose?

Prevention, detection, and legal resolution.

Forensic accounting — specialty?

Investigating financial statement fraud.

Fraud Triangle — components?

Pressure, opportunity, rationalization.

Organizational controls — aim?

Eliminate fraud pressures, rationalization, opportunities.

Money laundering — stages?

Placement, layering, integration.

Detection methods — example?

Benford’s Law and ratio analysis.

Red flags — purpose?

Identify suspicious activities in money laundering.

Benford’s Law — predicts?

Distribution of leading digits in datasets.

Ratio analysis — use?

Detect operational or fraudulent anomalies.

Government measures — goal?

Reduce large cash flows and enforce regulations.