This is a draft cheat sheet. It is a work in progress and is not finished yet.
Fraud Risk
Fraud |
The misrepresentation of facts that the individual knows to be false with the intention to deceive |
Overstating revenues and assets |
Understating expenses and liabilities |
Giving disclosures that are misstated or that omit important information |
Management fraud |
Fraudulent financial reporting |
Employee fraud |
Misappropriation of assets |
Fraud Risk categories |
Management's Characteristics and Influence |
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Industry Conditions |
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Operating Characteristics and Financial Stability |
Errors = unintentional
Fraud = intentional
Misappropriation of Assets
Fraud |
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Requires intent to deceive the victim |
Embezzlement |
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employees or nonemployees wrongfully taking money or property entrusted to them, by cover-up |
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to permanently deprive the owner |
Larceny |
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theft of an employer’s property that is not entrusted to an employee |
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to permanently deprive the owner |
Defalcation |
Misuse of funds by a fiduciary |
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intentional wrongdoing |
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OR negligence* |
Errors |
unintentional misstatements or omissions |
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