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Principles of Fraud Examination, 4th Edition by Joseph T. Wells

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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 ...

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