Cheating Symptoms Categories
1. Internal Audit Problems – Financial Weakness
The first thing to remember when looking at internal controls is the fraud triangle. Without all three elements of opportunity, pressure and rationality, it is less likely that fraud will occur. By creating controls that prevent these elements from being detected or timely, event managers can effectively check compliance.
Internal control issues arise from the structure of organizations. Symptoms of control deficiencies include lack of functions: separation of tasks, independent control, proper authorization, physical safeguards, system recovery and appropriate documentation
. Analytical Irregularities
These symptoms have unusual relationships with the ratios of current financial statements compared to previous years. Analytical studies identify transactions that are extreme cases and are outside the normal distribution of values. Common examples include: shortage of inventory, excessive use of credit for claims or the existence of new sellers. Accounting Abnormalities
Symptoms of accounting problems include faulty log entries, non-existent or fraudulent source documents, and incorrect general ledger balances. Log entries manipulated by intelligent fraudsters are usually cost accounts. In order to balance the accounting equation, they have to pay the same amount of expenses they have stolen. Source Documents can have many problems, as it is often a supplier account that users with direct access can manipulate. It's important that you keep all your original copies and check the use of confirmations with customers / manufacturers. Finally, general ledger problems occur when general ledger inequalities do not match the master file or individual account balances that are incompatible. In any case, it is a sign of a defective fraud scheme.
4. Extravagant Lifestyle and / or Unusual Behavior
Lifestyle changes are often the simplest for all the symptoms that can be perceived. Although bank records, investment records and tax information are difficult to investigate; real-estate records, UCC files, and other records can be easily verified to determine if there are any assets that have been purchased or removed. Unusual behavior can be observed through the individual's recognizable behavioral pattern to treat stress. Guilt leads to fear, fear leads to stress, and stress leads to change in behavior
. Tips and Complaints
These symptoms are symptoms instead of evidence, as they are often often unreasonable. Despite the failure, they can be extremely useful if they are in the best position to detect cheating.
-founders, executives and other staff are generally in the best position to detect fraud at theft deprivation stage
-the company's accountants and even the staff are probably in the best position to conceal fraud
– staff, friends, and Leaders are also in a better position to detect fraud in repentance
Because this is the case, it is important for companies to maintain a disruption protection program or to keep open an anonymous fraud hotline. Detection and Communication Provide the Best Protection against Fraud