False or Altered Disbursement Documents (Part 3)

By By Regent Emeritus Joseph R. Dervaes, CFE, CIA, ACFE Fellow

joseph-dervaes-50x50.jpg   Fraud’s Finer Points  


In this column, the final of three parts, we conclude our discussion of false documentation and inappropriate disbursements. Fraud cases with these attributes are legion; however, we can only discuss some of the most common issues fraud examiners face. When we suspect disbursement irregularities, we should always focus on the validity of the supporting documents. Every organization should train its accounts payable staff in the basics of identifying false or altered disbursement documents.  


Facsimile documents, even though they’re reproductions of original documents, are considered original source documents. So fraud perpetrators often use them to support fictitious disbursement transactions because internal reviewers or even external auditors aren’t likely to question them. Faxes obviously still have a legitimate purpose for emergency or other rush transactions. However, the organization should always require that vendors subsequently mail the original source documents to them. The staff should hold the faxes until the original source documents have been received and then file them with any other documents supporting the disbursement transaction. 

Unscrupulous employees might use the organization’s fax machine to send themselves vendor invoices. So always double check the vendor’s fax telephone number shown on the top of the facsimile with numbers in the organization’s vendor file, in the telephone book, or from the vendor’s website. And be suspicious if the number is missing; fraud perpetrators might have removed it from the faxed document before processing it. A fax in the file doesn’t necessarily mean the transaction is valid. 





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