ACFE CHNNAI CHAPTER
NEWSLETTER
Volume 1
OFFICE BEARERS
President
: Mr. Raman Narasimhan
nramans@gmail.com
Vice Persident: Mr. Vittal Raj
rvittalraj@gmail.com
Treasurer
: Mr. Venkatesan
hv@sundaramfinance.in
FROM THE PRESIDENT
We are very excited to present our first newwsletter from the Chennai
Chapter to the ACFE community in Tamil Nadu, Kerala and Andhra
Pradesh. It is a start to keep the members updated on the events and
the on-goings of the chapter in the forthcoming months. And also this
newsletter seek to communicate with the members and stay connected.
As an add-on this newsletter, trending news and sections like quiz to
think over will be provided as part of knowledge enrichment.
We would be glad to accept contributions/suggestions from the
members for the newsletter that can be published from the upcoming
editions. Future editions will have articles on areas that would be of
interest to our members.
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Warm regards to all.
a Happy New Year.
Wishing you in advance a Merry Christmas and
Raman Narasimhan
President
Vittal Raj
Vice President
H Venkatesan
Secretary
On the news
MONEY LAUNDERING
It is alleged that more than Rs. 5000 crore black
money was remitted from a branch of
Nationalzed Bank at Delhi to Hong Kong using
the provision such as pre-payment of imports.
CBI has filed a charge sheet against two
employees of the Bank for offences involving in
criminal conspiracy and cheating in connection
with illegal remittances of over Rs 5,000 crore
made to over 350 accounts in Hong Kong and
Dubai from Delhi Branch. Many fake companies
were floated with the name of directors who were
actually hawkers and rickshaw pullers.
A forensic probe has been ordered into alleged
irregularities by the Department of Financial
Services.
NEW AGENCY BEING SET UP
TO
PROBE
CORPORATE
ACCOUNTING FRAUD
The government is planning to set up
new agency to investigate large corporate
frauds. It focuses on robust mechanism
for faster examination into criminal or
illegal activities in an organisation. The
threshold for accounting frauds to be
probed by the upcoming agency is likely
to be Rs 500 crore and above.
http://articles.economictimes.indiatimes.
com/2015-1126/news/68582398_1_frauds-icai-sfio
SFIO has launched probe against 11 other
companies which were allegedly involved in the
suspicious Rs. 5000 crore forex transactions.
DO YOU KNOW
Tips are consistently and by far the most common
The higher the perpetrator’s level of authority, the
detection method. Over 40% of all cases were
greater fraud losses tend to be. Owners/executives
detected by a tip — more than twice the rate of any
only accounted for 19% of all cases, but they caused a
other detection method.
median loss of $500,000. Employees, conversely,
committed 42% of occupational frauds but only caused
a median loss of $75,000. Managers ranked in the
middle, committing 36% of frauds with a median loss
of $130,000.
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TAKE A QUIZ BREAK
1. Neem Inc. hires Fraud Contracting to
construct a storage building on Neem
property. The storage building collapses four
months after completion, and an investigator
is assigned to determine the cause. The
investigator finds several problems in the
construction project documents, including
missing compliance certificates, failed
inspection reports, and employee complaints
about the quality of the contractor’s
materials. Given these facts, which of the
following fraud schemes seems most likely
to have been perpetrated?
a. Nonconforming goods or services.
b. False invoicing via shell companies.
c. Unnecessary purchases.
d. Change-order abuse.
2. What is the primary objective of a fraud
risk assessment?
a. To provide an estimate of an
organization’s fraud losses.
b. To help an organization’s leadership
identify areas most vulnerable to fraud.
c. To establish the guilt or innocence of an
employee suspected of committing fraud.
d. To assess the design and effectiveness of
internal controls over financial reporting
3. ABC Auditors is hired to perform an
external audit of the financial statements of
XYZ Co., a publicly traded U.S. company.
Based on information obtained during the
audit and through consultation with legal
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counsel, ABC concludes that XYZ has
violated the FCPA. In response to the
detected illegal act, ABC should do all of the
following
EXCEPT:
a. Consider the illegal act’s effect on the
amounts presented in XYZ’s financial
statements
b. Evaluate the adequacy of disclosure in the
financial statements of the illegal act’s
potential effects on XYZ’s operations
c. Consider the implications of the illegal act
in relation to other aspects of the audit
d. Disclose the illegal act to the SEC
4. Which of the following is the LEAST
likely to result in a data breach?
a. Compromised passwords
b. Thefts of encrypted laptops
c. Unsecured wireless networks
d. Outdated network security systems
5. Rakesh is an internal auditor for Steel
Corp. She ran a report that listed payments
to employees for business expenses that
occurred while the employee was on
vacation. What type of fraud scheme is
Rakesh most likely to find?
a. Petty cash larceny
b. Concealed expenses
c. Mischaracterized expense reimbursement
d. Falsified salary
Lexicon
Kiting - Using several bank accounts in different banks , making deposits and writing cheques
against the accounts before the deposit cheques clear the banking system, creating a float of
money out of nothing more than the lag in time while cheques clear and post to their respective
accounts.
Phreaking - A slang term coined to describe the activity of a subculture of people who study,
experiment with, hack into or exploit telephone systems, the equipment of telephone
companies, and systems connected to public telephone networks to obtain communications
services at no cost.
Spear Phishing – Phishing email that looks as if it came from someone you know. Typically
the email contains a file that when opened will infect your computer with a bot or a key logger
or something equally as bad.
Dumpster Diving- The act of rummaging through someone’s trash to obtain personal
information used to commit identity theft.
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