Principles of Fraud Examination, 4th Edition

EXHIBIT 6-1

CHAPTER 6

PAYROLL SCHEMES

LEARNING OBJECTIVES

After studying this chapter, you should be able to:

6-1	List and understand the three main categories of payroll fraud
6-2	Understand the relative cost and frequency of payroll frauds
6-3	Define a ghost employee
6-4	List and understand the four steps of making a ghost employee scheme work
6-5	Understand how separation of duties in payroll and human resources functions can reduce the threat of payroll fraud
6-6	Be familiar with methods identified in this chapter for preventing and detecting ghost employee schemes
6-7	List and understand the four ways that employees can obtain authorization for a falsified time card in a manual system
6-8	Understand the role that payroll controls play in preventing falsified hours and salary schemes
6-9	Discuss the methods identified in this chapter for preventing and detecting falsified hours and salary schemes
6-10	Understand how employees commit commission schemes
6-11	Identify red flags that are typically associated with commission schemes
6-12	Be familiar with proactive audit tests that can be used to detect various forms of payroll fraud

CASE STUDY: SAY CHEESE!¹

Every once in a while, a person devises a fraud scheme so complex that it is virtually undetectable. Intricate planning allows the person to cheat a company out of millions of dollars with little ...