Fraud in Accounts Payable How to Prevent It

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Edition: 1st
Format: Hardcover
Pub. Date: 2008-09-09
Publisher(s): Wiley
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Summary

Praise for Fraud in Accounts Payable"Fraud in Accounts Payable is an insightful book that takes an in-depth look at the three most frequently committed fraudulent cash disbursement schemes directly related to your accounts payable function. Mary provides colorful and poignant stories showing how easy it can be to steal from both within and outside an organization. But the real beauty of this book is that Mary illustrates ways you can immediately begin implementing effective and efficient controls to reduce the opportunities for fraud within your organization." -Matthew D. Storlie, CFE, Fraud & Forensic Services Virchow, Krause & Company, LLP"Mary has delivered another book full of specific suggestions for improving accounts payable processes. Fraud in Accounts Payable is an easy-to-read guide that identifies real-world problems and offers practical solutions. Her books and articles have quickly become some of my core resources." -Stephanie K. O'Cain, Chief Financial Officer Municipal Association of South Carolina"Fraud could never take place in my accounts payable department.""My employees would never steal from me! I trust them too much . . ."Sound familiar?The definitive resource for every accounts payable department, Fraud in Accounts Payable affords you a bird's-eye view of what's really going on in your accounts payable department and how you can defend it against every potential type of fraud, including check fraud, payroll fraud, and T&E fraud.Written by Mary Schaeffer, America's most accomplished accounts payable expert, this thorough and highly readable guide is filled with authoritative tips, techniques, and advice on:Uncovering hidden pockets of weakness where your organization is vulnerableGetting rid of those bad practices that allow all sorts of frauds to flourishSetting up antifraud safeguardsReminding us to "never say never," Fraud in Accounts Payable explains in plain English how to protect your accounts payable department so it becomes-and stays-financially healthy.

Author Biography

Mary S. Schaeffer is a nation-ally recognized accounts payable expert. She is the founder and Editorial Director of Accounts Payable Now & Tomorrow, a newsletter for professionals interested in payment issues. She is the author of twelve books and has written hundreds of articles that have appeared in publications such as the New York Times, Corporate Cashflow, Treasury & Risk, Business Credit, the Writer, Newsday, and newsweek.com. She has an MBA in finance and is a member of the New York Financial Writers' Association. She is a regular contributor to AICPA's Corporate Finance Insider publication.

Table of Contents

Prefacep. xvii
Acknowledgmentsp. xxiii
Where Accounts Payable Fraud Can Happen in Your Organizationp. 1
Profiles of Fraud in the Business Worldp. 3
Three Big Mythsp. 4
Fraud Statisticsp. 4
Occupational Fraud: It's a Big Problemp. 5
Definitions and Frequencyp. 5
Who Gets Hit the Hardest?p. 6
How Fraud Is Detectedp. 7
Who Commits Occupational Fraud?p. 7
To Prosecute or Notp. 8
Is Fraud an Equal Opportunity Crime?p. 9
Fraud in the Eyes of the Beholderp. 9
Effect of Status of Fraudsterp. 10
Big Boss Issuep. 11
Why Do Insiders Steal?p. 11
Conditions that Permit Frauds to Occurp. 12
Why Aren't More Fraudsters Prosecuted?p. 13
Fraud in the Real Worldp. 13
Concluding Thoughtsp. 14
Check Fraud: Still a Huge Problemp. 17
Internal Controls to Prevent Check Fraud by Insidersp. 17
Recommended Controlsp. 19
What Else Can You Do?p. 20
How Bad Is the Check Fraud Problem?p. 20
What Does the Law Say?p. 21
Impact on Accounts Payablep. 22
What Should You Do?p. 22
Positive Pay and Its Cousinsp. 23
Internal Controls, Segregation of Duties, and Positive Pay Exceptionsp. 25
Internal Controls and Paper Checksp. 26
What Can Go Wrongp. 26
Consequences of Poor Internal Check Production Processesp. 27
The Right Wayp. 27
The Best Wayp. 29
Questions that Reveal Your Internal Check Controlsp. 29
Best Check-Handling Practices between Printing and Mailingp. 30
Mailing Checksp. 30
From Priting to Mailing: Do You Know Where Your Checks Are?p. 31
When the Checks Are Signed and Returnedp. 33
Wire Transfersp. 34
Rebate and Refund Checksp. 34
Rush Checksp. 34
Why Returning Checks to Requisitioners Can Be a Problemp. 35
How Companies Handle Check Return Requests by Requisitionersp. 36
Fraud in the Real Worldp. 38
Concluding Thoughtsp. 41
Check Stock: Stop the Fraudsters' Pressesp. 43
Security Features in Your Check Stockp. 43
What Else?p. 45
Some Check Fraud Security Featuresp. 45
A Word about Void Pantographsp. 49
Void Pantographs and Positive Payp. 49
Fraud in the Real Worldp. 50
Concluding Thoughtsp. 50
P-Card: Not as Big an Issue as You Might Thinkp. 51
Printing of the Invoicep. 51
Start Off on the Right Footp. 52
Policy and Procedures Manualp. 52
Spell Out Consequencesp. 53
Require Documentationp. 54
Don't Overlook Receiptsp. 54
Role of a Program Administrator in Fraud Preventionp. 55
Approvals and Compliancep. 55
Role of Limits with Respect to Fraudp. 56
Train, Train, and Then Train Againp. 56
What About Inappropriate Use?p. 57
Fraud in the Real Worldp. 58
Closing Thoughtsp. 59
Electronic Payment Fraud: Not a Growth Industry-Yet!p. 61
ACH Blocksp. 61
ACH Filtersp. 62
ACH Positive Payp. 63
Payment Account Data: Is It Accurate?p. 63
Ach Data Accuracy: Real-Life Solutions to a Very Practical Problemp. 65
CPA's Perspectivep. 68
Fraud in the Real Worldp. 70
Closing Thoughtsp. 70
Desktop Fraud: Few Think About This-But Everyone Shouldp. 71
Examplep. 71
Overviewp. 72
Issuesp. 73
Recommendationp. 74
Lovallo's Guidelinesp. 74
Bringing It All Togetherp. 76
Fraud in the Real Worldp. 77
Concluding Thoughtsp. 78
Travel and Entertainment Fraud: Not All Your Employees Are Honestp. 79
The Book that Teaches Your Employees How to Stealp. 80
Danger Signsp. 80
Other T&E Scamsp. 81
Drawing a Linep. 82
Latest T&E Issue: Verifying Boarding Passes Printed at Homep. 82
Solutions to the Boarding Pass Issuep. 83
T&E Fraud Prevention Best Practicesp. 84
Detecting Expense Reimbursement Fraudp. 85
Uniform Enforcement of the T&E Policyp. 86
What to Do When Expense Reimbursement Fraud Is Detectedp. 86
Last-Ditch Collection Effortsp. 87
Fraud in the Real Worldp. 88
Closing Thoughtsp. 90
Petty Cash Fraud: Petty Indeedp. 93
Petty Cash Awful Practicesp. 93
How Much Money Should the Box Have?p. 94
Petty Cash Boxp. 95
Surprise Auditsp. 96
Where Does Responsibility for the Box Lie?p. 96
Do We Still Need Petty Cash?p. 97
Receipt Reviewp. 97
Petty Cash versus T&Ep. 98
Fraud in the Real Worldp. 98
Concluding Thoughtsp. 99
Vendor and Invoice Fraud: Not Every Invoice (Or Vendor!) Is Legitp. 101
Fraudulent Invoices-or Notp. 102
Solicitations that Look Like Invoicesp. 102
Other Common Invoice Fraudsp. 103
Fraud and Poor Payment Practicesp. 104
A Word about Collusionp. 106
Brief Commentary on Purchasingp. 106
Up-Front Vendor Verificationp. 107
Control Challenge in Real Lifep. 107
Advice from the Better Business Bureaup. 111
Fraud in the Real Worldp. 112
Concluding Thoughtsp. 113
Master Vendor File Fraud: How Employees Play Games with Your Recordsp. 115
Some Really Bad Master Vendor File Practicesp. 116
Master Vendor File Reportsp. 116
Coding Standards Prevent Fraudp. 117
Cleansing the Master Vendor Filep. 118
Who Has Responsibility for the Master Vendor Filep. 119
A New Systemp. 120
Master Vendor File and Your Employeesp. 121
Fraud in the Real Worldp. 121
Closing Thoughtsp. 122
Payroll Fraud: Ghostbusting and Morep. 123
Phantom Employeesp. 123
What You Can Do to Detect and Prevent Ghost Employeesp. 124
Falsified Hours and/or Salaryp. 125
What You Can Do to Detect and Prevent Employees from Falsifying Datap. 126
Commission Schemesp. 127
False Workers' Compensation Claimsp. 128
Some Overall Prevention Tacticsp. 129
Fraud in the Real Worldp. 130
Concluding Thoughtsp. 131
Telecom Fraud: Yes, It Can Happen to Youp. 133
Types of Phone Fraudp. 133
Nuisance Fraudp. 134
Examples of Crammingp. 134
Getting Refunds and Combating Crammingp. 135
Slammingp. 136
Phone System and Voice Mail Fraudp. 137
Social Engineering Fraudp. 138
Call Forwarding/Conferencing Problemsp. 139
VOIP Fraudp. 140
Fraud in the Real Worldp. 141
Concluding Thoughtsp. 142
Strategies to Deter, Prevent, and Detect All Sorts of Accounts Payable Fraudp. 143
Best Practices-Not: Tactics that Unintentionally Promote Fraudp. 145
Closing Thoughtsp. 147
Fraud Monitoring Reports: A Necessary Evilp. 149
Automated Monitoringp. 149
How Anyone Can Run Reportsp. 150
A Word about More Sophisticated Monitoringp. 150
How Much Checking Is Enough?p. 151
The Big Report Everyone Should Runp. 152
The Easy Reportp. 152
Other Fraud Detection Reportsp. 153
The ACT Listp. 159
Closing Thoughtsp. 160
Fraud Detection and Prevention: Simple Tactics You Can Usep. 161
2006 Report to the Nation Fraud Detectionp. 161
PricewaterhouseCoopers 2007 Global Economic Crime Survey Fraud Detectionp. 162
Anonymous Hotlinesp. 162
What Companies Can Do to Prevent Fraudp. 163
Simple Tactics to Make Sure No One Robs the Till on Your Watchp. 163
Fraud in the Real Worldp. 166
Closing Thoughtsp. 167
Sarbanes-Oxleyp. 169
Sarbanes-Oxleyp. 169
Overview of the Actp. 170
Sarbanes-Oxley Surveyp. 170
Impact of the Act on Accounts Payable Operationsp. 171
Outside Influencesp. 172
Functions Improvedp. 172
T&E Reimbursement and Review Processesp. 173
Internal Audit Reviewsp. 173
Backup for Check Requestsp. 174
Records Retention Policyp. 174
1099 Reportingp. 174
Invoicesp. 175
Master Vendor Filep. 176
Other Regulatory Concernsp. 176
Using the Act to Enforce Needed Changep. 176
The Act and Its Effects on Private Companiesp. 177
Whistle-Blower Protectionsp. 178
The Anonymous Hotlinep. 178
Concluding Thoughtsp. 179
Fraud Schemes: Physical and Virtual Checksp. 181
2007 Top Fraudsp. 183
Segregation of Dutiesp. 185
The Sarbanes-Oxley Act of 2002 Titlesp. 187
Resourcesp. 191
Indexp. 195
Table of Contents provided by Ingram. All Rights Reserved.

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