CASH RISK ASSESSMENT
Overview
Fraud Overview
Fraud Schemes
When & How Fraud Happens
Our Approach to Fraud Deterrence
Fraud Common in Workplaces
 Occupational fraud is the use of ones occupation
for personal enrichment through misuse of the
employing organizations resources.
• Nearly 75% of all companies from around the
world suffer from fraud
• 85% of the worst frauds reported were committed
by company employees
• Small business suffer higher fraud losses than
large organizations
Cash Risk Assessment
Cash fraud is more common
 Fraudsters most often target currency, check
and money order
* Data from ACFE Report to the Nation on Occupational Fraud & Abuse
Cash Risk Assessment
Skimming
 Scheme in which cash
is stolen before it is
recorded on the
organization’s books
and records.
• Employee accepts
payment from a
customer but does
not record the sale
Cash Risk Assessment
Cash Larceny
 Scheme in which cash
is stolen from an
organization after it
has been recorded on
the organization’s
books and records.
• Employee steals
from daily receipts
before they can be
deposited in bank
Cash Risk Assessment
Billing
 Scheme in which a
person steals his/her
employer to issue
payment by submitting
invoices for fictitious
goods/services, inflated
invoices or invoices for
personal purchases.
• Employee purchases
personal items,
submits invoice for
payment.
Cash Risk Assessment
Reimbursements
 Scheme in which an
employee makes a
claim for
reimbursement of
fictitious or inflated
business expenses.
• Employee files
fraudulent expense
report, claiming
personal travel,
nonexistent meals, etc.,
Cash Risk Assessment
Check Tampering
 Scheme in which a
person steals his/her
employer’s funds by
forging/altering a check
on one of the
organization’s back
account, or steals a
check the organization
has issued to another
payee.
• Employee steals blank
checks, makes them out
to himself/an accomplice.
Cash Risk Assessment
Payroll
 Scheme in which an
employee causes
his/her employer to
issue a payment by
making false claims
for compensation.
• Employee claims overtime for un-worked
hours
• Employee adds ghost
employees to the
payroll
Cash Risk Assessment
Wire Transfers
 Scheme in which a
person steals his/her
employer’s funds by
fraudulently wire
transferring them out
of the employer’s bank
accounts.
• Employee causes
funds to be wired from
company bank
accounts to an account
controlled by employee
or accomplice
Cash Risk Assessment
Disbursements
 Scheme in which an
Employee makes false
entries on a cash
register to conceal the
fraudulent removal of
cash.
• Employee fraudulently
voids a sale on his cash
register and steals the
cash.
Cash Risk Assessment
When fraud happens
Pressure
•Pressure is what causes a person to commit
fraud. Eg: Overspending
Rationalization
•Rationalizing involves a person reconciling
his/her fraudulent behavior. Eg: Person labels
the theft as borrowing
Opportunity
•Opportunity is the ability to commit fraud.
The fraudster must believe their activities will
not be detected. Eg: Weak internal control
Cash Risk Assessment
How fraud is detected
Cash Risk Assessment
Our Approach
Structure
– Internal
Controls
Listen
Train
“STALL”
FRAUD
Learn &
Appraise
Cash Risk Assessment
Audit
“STALL” Approach - Structure
Structure – Internal Control
• Setup sound internal controls that
prevent or deter fraud
• Evaluate and appraise the existing
internal control
• Identify loop holes and proactively
work to eliminate weak points
Cash Risk Assessment
“STALL” Approach - Train
Train – Personnel
• Train management on effective cash
management and anti-fraud controls
• Train cash management personnel about
ways to identify/prevent fraud
• Advice other personnel on ethics, ways to
prevent fraud and whistle-blowing
principles
Cash Risk Assessment
“STALL” Approach - Assess
Assess – Records & Systems
• Perform surprise assessments to evaluate
effectiveness of internal controls and
presence of fraud/error
• Provide to management a confidential Risk
Assessment Report
• Provide to management a “Risk Score”
computed using the Risk Assessment Model
Cash Risk Assessment
Risk Assessment Report
Risk Score
Number of
Receipts
Total Receipts
Highest
Receipt
Number of
Payments
Total
Payments
Highest
Payment
Average Cash
Level
Number of
Defective
Transactions
Target Cash
Balance
Daily Cash
Level
Fraud Risk
Score
Records
Accuracy
Score
Significant Risk
Factors
Summary
Other
Disclosures, if
necessary
Cash Risk Assessment
Risk Assessment Model
Reconciliation
Management
participation
Overall
Internal
Control Setup
Risk
Score
Accuracy of
records
Cash Risk Assessment
Number of
transactions
with
error/fraud
Quality of
records
Transactions
not following
internal
control
Risk Assessment Report
Cash Risk Assessment
“STALL” Approach – Learn
Learn & Adapt – Records & Systems
• Learn about the clients internal
controls or personnel and provide
specific guidance's
• Continue to appraise management
on warning signs and ways to
improve internal controls
Cash Risk Assessment
“STALL” Approach – Listen
Listen – To Whistleblowers
• Provide an avenue for whistle
blowers to disclose employee frauds
• Follow-up on any such disclosures
relating to employee frauds
• Protect and safeguard the identity of
whistleblowers
Cash Risk Assessment
Our Service
12 Surprise Audits
with Risk
Assessment reports
12 Training Session
for Personnel on
Ethics and Internal
Control
2 Session for briefing
and educating
management on
internal control
Cash Risk Assessment
2 Review of overall
internal control
Continuous
Maintenance of
Hotline for
Whistleblowers
GET IN TOUCH TODAY:
Phone: (044) 28362531 / 32 / 33
Email : lionel@verveindia.com
Web : http://www.verveindia.com