Fraud Forum Results

Exploring New Ways to Protect the Organization’s Cash

By By John Warren, J.D., CFE

If detecting and preventing occupational fraud is your professional duty, plan on filing this issue of The White Paper in your “frequently referenced” file (along with all the other issues, of course). The Association is proud to announce the results of the first-ever Occupational Fraud Forum, which took place last August in New Orleans, La., just prior to the Ninth Annual Fraud Conference.

Participating in this executive roundtable, “Exploring Ways to Protect the Organization’s Cash,” was a wide range of professionals dedicated to fighting white-collar crime, such as forensic accountants, auditors, loss prevention specialists, lawyers, and many others. They were presented with detailed information regarding the mechanics of three types of occupational fraud (skimming, check tampering, and billing schemes) and then were asked to devise methods of detecting and preventing these crimes.
Here are the results:

Skimming and Cash Larceny Schemes 

Skimming is the theft of cash before it is recorded in an organization’s books. It is an off-book scheme that is particularly hard to detect by normal accounting procedures, because the scheme leaves no direct audit trail. Skimming is among the most pervasive forms of occupational fraud.

Skimming at the Point of Sale 

The danger of skimming is particularly great at the point of sale when an employee first receives cash from a customer. In the retail industry, for example, employees who work at a cash register often pocket sales without recording them. Many times, the organization’s best chance to detect a skimming scheme is to catch the fraudster in the act. Forum participants named some ways an organization could detect employees stealing cash at the point of sale:

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