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Corporate Fraud and Internal Control + Software Demo: A Framework for Prevention by Richard E. Cascarino

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CHAPTER THREE

Frauds Against the Individual

Rather fail with honor than succeed by fraud.

—Sophocles (496–406 B.C.)

After studying this chapter, you should be able to:

  • Identify specific types of fraud against the individual that, left unchecked, increase the probability of a loyal employee turning against the employer in desperation.
  • Recognize red flags indicating these types of fraud.
  • Identify appropriate controls to reduce the likelihood of such frauds occurring and to increase the probability of early detection if they occur.
  • Identify the corporate responsibility in educating employees against potential fraud attacks against them personally.

Incidents of private and public fraud are being reported daily in the media, and more and more prosecutions for this offense are being conducted in the various courts. This chapter examines the phenomenon of fraud in order to obtain a full appreciation of what it exactly is.

ONLINE AUCTION FRAUD

With the increasing popularity of Internet auctions, online auction fraud has become a significant risk factor to individuals. It includes fraud due to the misrepresentation of a product advertised for sale through an Internet auction site, the nondelivery of an item purchased through an Internet auction site, and nonpayment for goods purchased through an Internet auction site. At any given time, several million items are for sale via online auction ...

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