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Managing Fraud Risk: A Practical Guide for Directors and Managers

Book Description

A strategic, practical, cost-effective approach to fraud prevention

In troubled economic times, the risk of fraud and financial crime increases. In our post credit crunch environment, new laws and tougher penalties for financial crime mean that if you are in business, you have a responsibility to help fight fraud.

However, to design effective, proportionate fraud controls for your business, you need a complete picture of all the risks. Managing Fraud Risk shows you where to look for fraud, setting out a route-map for finding and fighting fraud risks in your business, with the practical, strategic advice you need.

Combining the latest theory with forensic risk analysis, this book reveals how you can provide assurance to your Board and stakeholders. Practical examples are used to clearly show cost-effective techniques for preventing and detecting business fraud. An innovative fraud awareness quiz enables you to easily apply the theories and principles.

  • Answers questions such as: Who commits more fraud: men or women? How many of your employees are prepared to falsify documents?

  • Essential information to ensure your procedures are sufficient to meet compliance with new international legislation increasing the liability of directors and managers in cases of fraud and corruption

  • Takes a new perspective from the point of view of business risk, making it unique to other texts that take only an auditing, investigative, or specialist approach

This route-map is essential reading to help you navigate the complex landscape of business fraud.

Table of Contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Dedication
  5. Acknowledgements
  6. Introduction
    1. Making me an Offer that I can't Refuse
    2. Opening Remarks
    3. About this Book
    4. Concepts And Focus
    5. Fraud: The Gorilla in the Room?
    6. Closing Remarks
  7. Chapter 1: Responsibility
    1. What a Mess – How could all this have been Allowed to Happen?
    2. Introduction
    3. Answers to the Quiz
    4. Responsibility Framework
    5. The Linkage between Risk Management and Internal Controls
    6. The Importance of Evidence
    7. The Role of Audit in Fraud Prevention and Detection
    8. The Strategic Approach to Managing Fraud Risk
    9. The Fraud Risk Management Framework
  8. Chapter 2: Meaning
    1. The Hairs on the Back of My Neck
    2. Introduction
    3. Answers to the Quiz
    4. Fraud Definitions
    5. ACFE Occupational Fraud Typology
    6. The ACFE's “Report to the Nation”
    7. Fraud and the Law
    8. Some Examples of what the Term “Fraud” Actually Includes
    9. Fraud Costs – Scale and Direction of Travel
    10. Answers to the Quiz
  9. Chapter 3: People
    1. Appearances can be Deceptive
    2. Introduction
    3. Answers to the Quiz
    4. The Fraud Triangle – The Key Behaviourial Model
    5. Motives of Fraudsters – Bringing the Fraud Triangle up to Date
    6. Classification of Fraudsters
    7. Profile of a Fraudster
    8. Motives of Fraudsters – The Business Perspective
  10. Chapter 4: Risk
    1. We are All Risk Managers Now
    2. Introduction
    3. Answers to the Quiz
    4. Risk Management Primer
    5. Avoid the Tick-Box Attitude
    6. Strategic Risk Management and the “4Ts” Approach
    7. The Use of Insurance
    8. The Key Risk – Reputation
    9. Taking a Risk-Based Approach to Financial Crime
    10. Taking a Risk-Based Approach to Fraud
    11. The “4Ts” Approach – Answer to the Exercise
  11. Chapter 5: Governance
    1. People Disappear in Texas
    2. Introduction
    3. Answers to the Quiz
    4. Governance Overview – Relationships and Agency Risk
    5. The Development of Corporate Governance Codes and Legislation
    6. Competency and Behaviour – The Key Drivers of Board Performance
    7. The Corruption Component of Fraud
  12. Chapter 6: Controls
    1. Getting Run Over by a Bus
    2. Introduction
    3. Answers to the Quiz
    4. Internal Controls Overview
    5. Control Characteristics
    6. Internal Control Structure
    7. Modern Internal Controls Frameworks
    8. The Role of Audit in Fraud Prevention and Detection
    9. The External Audit
    10. Internal Auditing
    11. Limitations of Traditional Audit Techniques
    12. SAS 99: Considerations of Fraud in a Financial Statement Audit
    13. The Role of the Audit Committee
  13. Chapter 7: Prevention
    1. A Question of Black or White
    2. Introduction
    3. Answers to the Quiz
    4. Fraud Prevention Controls
    5. Key Aspects of Prevention – Generic Controls
    6. Control Inhibitors and Concealment Strategies
    7. Specific Anti-Fraud Prevention Controls
    8. The Six Key Fraud Prevention Controls
    9. 5-Point Fraud Prevention Plan
  14. Chapter 8: Detection
    1. “But He Seemed Like such A Nice Guy, He Still Lives with His Mother”
    2. Introduction
    3. Answers to the Quiz
    4. The Deterrence Factor
    5. Fraud Detection
  15. Chapter 9: Investigation
    1. Don't Crash the Car
    2. Introduction
    3. Answers to the Quiz
    4. Fraud Investigation Case Study
    5. Fraud Investigation – Best Practices
    6. The Litigation Process and Involving the Police
    7. Insurance – The Quantum of Loss Statement and Making Claims
    8. Communication Issues
    9. Fraud Investigations – Practical Examples
  16. Chapter 10: Ethics
    1. The RICE Model
    2. Introduction
    3. Answers to the Quiz
    4. The Business Ethics Framework
    5. Pressure, Incentives and Short-Term Targets
    6. The Business Ethics Toolbox
    7. Business Ethics in Action
    8. Integrated Approach
  17. Epilogue
    1. Distinguished Merit
  18. References
    1. Introduction
    2. Chapter 1
    3. Chapter 2
    4. Chapter 3
    5. Chapter 4
    6. Chapter 5
    7. Chapter 6
    8. Chapter 7
    9. Chapter 8
    10. Chapter 9
    11. Chapter 10
  19. Index