Question

• Discuss various billing schemes. Provide an example of a Billing Schemes and a controls to prevent and deter.
• A senior manager includes costs that were not incurred on a expense report. As a result, the senior manager was fired for falsifying a report, i.e. Fraud. What is the “tone at the top” message sent to other employees? Is it a good idea to communicate the senior manager’s termination to other employees?
• Name various ways a “ghost employee” is detected? Describe controls that would deter this type of activity.

Answer 1

The fraudster worked as an office manager and was a trusted long time employee. Part of the job was approving invoices for payment. His supervisor did not check the invoices properly before payment was made as they had already been approved.

ABC Pty Ltd was a regular supplier of computer services to the company. The employee generated invoices from ABC (Aust) Pty Ltd, a fictitious entity registered for the purpose of the fraud. The paper work contained the ACN and ABN of the real ABC Pty Ltd.

The employee created false invoices and approved them for payment. These were paid through the normal payments system. The payments were directed to a post office box set up for that purpose and deposited into a bank account opened in the name of ABC (Aust) Pty Ltd with the registration documents.

Yes we must let the other people know these type of things with the implications if anybody commits the same in the future so that other people do not try to put his shoe into these type of frauds.