A
Asset Misappropriation
DEFINITION
Asset misappropriation involves the theft or misuse of an organization’s assets by individuals in a position of trust.
MEANING
Although usually involving smaller amounts per incident, cumulative losses can be substantial.
EXAMPLE
Unauthorized personal expenses charged to a company credit card.
C
Cash Larceny
DEFINITION
The theft of cash after it has been recorded in the accounting system.
MEANING
Typically requires direct access to cash and weak controls.
EXAMPLE
Cash is stolen from the register after closing.
Check Tampering
DEFINITION
The misuse or alteration of checks.
MEANING
Common in manual payment environments.
EXAMPLE
A check is issued to an unauthorized payee.
D
Duplicate Payments Red Flag
DEFINITION
Multiple payments for the same invoice.
MEANING
Indicates weak controls.
EXAMPLE
Invoice paid twice.
E
Expense Account Fraud
DEFINITION
The submission of false or inflated expense claims.
MEANING
Often small per incident but cumulative.
EXAMPLE
Personal meals claimed as business expenses.
Expense Reimbursement Fraud
DEFINITION
Improper expense reimbursement claims.
MEANING
Often small but frequent.
EXAMPLE
Duplicate or altered receipts.
F
False Invoice Scheme
DEFINITION
Invoices for goods or services not provided.
MEANING
Often linked to collusion.
EXAMPLE
Invoice without proof of delivery.
G
Ghost Employee
DEFINITION
Fictitious or terminated employees kept on payroll.
MEANING
Enabled by weak joiner, mover, leaver processes.
EXAMPLE
Salary paid to a non-existent employee.
I
Inventory Theft / Asset Theft
DEFINITION
The unauthorized taking of an organization’s physical assets, including inventory, equipment, or materials.
MEANING
Common in environments with weak inventory controls and limited oversight.
EXAMPLE
An employee steals goods from the warehouse for personal resale.
Invoice Splitting
DEFINITION
Artificially splitting invoices to bypass approval thresholds.
MEANING
A common control circumvention technique.
EXAMPLE
Invoices are divided to avoid approval requirements.
R
Register Disbursement Scheme
DEFINITION
Improper payments made through legitimate disbursement systems.
MEANING
Often involves fake documentation.
EXAMPLE
Payment made to a fictitious vendor.
S
Skimming
DEFINITION
The theft of cash before it is recorded.
MEANING
Difficult to detect because no accounting record exists.
EXAMPLE
Cash sales are not recorded.