Your training includes a comprehensive review of the ACFE Report to the Nation, the FBI and National White Collar Crime Center, and other organizations that provide reports and information on white-collar crime.
Report to the Nation
- Download the latest Report to the Nation on Occupational Fraud and Abuse. This report gives a projection of the cost of fraud based on the percent of revenue. Explain this in terms of an example for an individual company with revenues of $25 million and net income of $3 million. Calculate the total estimated amount of fraud and the percentage that the total sales must grow just to cover the fraud.
- Also, note which type of fraud categories had the most frequent and the highest loss. Identify the industries with the most frequent and highest losses because of fraud.
- Review the FBI and or the National White Collar Crime Center Web sites, and select a fraud category for further discussion. Prepare a brief summary noting how serious the problem is today.
ABC order for references. References need to be in APA format. Need at least 5.
Explanation & Answer
Running head: INDIVIDUAL PROJECT
It is patently clear that fraud the pursuing of a dishonest act that causes significant
financial loss to an organization or individual. Markedly, this may include stealing of
one's personal property, employees stealing money from their employer; deception is
used at the time of committing the act. As well, the concealing, deliberate falsification
of documents intended to be deployed in the proper conduct of business for personal
gain is fraud. It is heeded that fraud can be conducted by people working for the
organization or by outside individuals (Wells, 1997).
Calculations on the total estimated amount of fraud and the percentage that the
total sales must grow just to cover the fraud
According to report to the nations on occupational fraud and abuse in typical
organizations, it is estimated that occupational fraud on revenue was 5 %. As such,
for a company whose sales revenue is $ 25 and net income $ three million. The total
estimated fraud will be
Total sales with fraud
Percentage for sales to grow
As from the figures above, it is observed that in the scenarios where fraud is a
concern, the aggregate revenues of the company the total losses is $ 1,250,000.
Therefore, this has the potentiality of compelling the company to work extra harder to
cover up the fraud by increasing its sales by the same amount (Wells, 2007).
The Types of Fraud Categories Had the Most Frequent and the Highest Loss
Research that was conducted in the recent past yielded various outcomes. In the
first place, it was observed that fraud in most organizations is committed by
employees. It has also been demonstrated that the most common types of fraud that
employees commit are asset misappropriation, corruption and bribery and financial
statements fraud. Ideally, asset misappropriation occurs in the following ways:
stealing of money from the company, forging of cheques, stealing of stock and fraud
in the payroll...