Introduction to Forensic Accounting

Part 1 Tutorial
[2016/2017] 1st Semester
Tunku Puteri Intan Safinaz School of Accountancy,
College of Business, Universiti Utara Malaysia
Dr. Oluwatoyin Muse Johnson Popoola, PhD, MBA,
FCTI, FCA, CFA,RPA
Coordinator & Lecturer: A161 BKAB 3013 Forensic
Accounting

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Topics to Be Covered

Milestone 1
Definition
and
taxonomy
of fraud
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Milestone 3
Nature of
Milestone 2
fraud
Importance
of forensic
accounting

Milestone 4
Tutorial

Discussion Questions
Q1. What is fraud?
Q2. How does fraud affect individuals, consumers,
and organizations?
Q3. List and describe the five different types of
frauds.

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True or False?
Q4. One of the most common responses to fraud is
disbelief.
Q5. Perpetrators use trickery, confidence, and deception to
commit fraud.
Q6. When perpetrators are convicted of fraud, they often
serve jail sentence and/or pay fines.
Q7. The single most critical element of fraud to be
successful is opportunity.
Q8. Unintentional errors in financial statements are a form
of fraud.

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True or False?
Q9. A negative outcome in a civil lawsuit usually results in
jail time for the perpetrator
Q10. Indirect fraud occurs when a companys assets go
directly into the perpetrators pockets without the
involvement of third parties.
Q11. When perpetrators are convicted of fraud, they often
serve jail sentence and/or pay fines.
Q12. Occupational fraud is fraud committed on behalf of an
organization.
Q13. Advances in technology have had no effect on the size
or frequency of fraud.
Q14. Most people agree that fraud-related careers will be in
demand in the future.

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Multiple Choice
Q15. Why does fraud seem to be increasing at such an alarming
rate?
a. Computers, the Internet, and technology make fraud easier to
commit
b. Most frauds today are detected, whereas in the past many
were not.
c. A new law requires that fraud be reported within 24 hours.
d. People understand the consequences of fraud to
organizations.
Q16. Which of the following is not an important element of
fraud ?
e. Confidence
f. Deception
g. Trickery
h. 11/18/16
Intelligence

Multiple Choice
Q18. People who commit fraud are usually:
a. New employees
b. Not well groomed and have long hair and tattoos
c. People with strong personalities
d. Trusted individuals
Q19. Fraud is considered to be:
e. A serious problem that continues to grow.
f. A problem that affects very few individuals
g. A mild problem that most businesses need not worry about
h. A problem under control.
Q20. The use of ones occupation for personal enrichment through the
deliberate misuse or misapplication of the employing organizations
resources or assets is the definition of which of the following types of
fraud?
i. Employee embezzlement or occupational fraud
j. Investment scams
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k. Management fraud

Multiple Choice
Q21. Studying fraud will help you:
a. Learn evidence gathering skills
b. Avoid high-risk and fraudulent activities
c. Learn valuable interviewing skills
d. All of the above
Q22. Which of the following is not a reliable resource for fraud
statistics?
e. Health agencies
f. Insurance organisations
g. FBI agencies
h. Fraud perpetrators.
Q23. Which of the following statements is true?
i. Bank robberies are more costly than frauds.
j. Fraud is often labeled the fastest growing crime.
k. FBI agencies are currently spending approximately 35 percent of
their time
on fraudulent activities.
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Multiple Choice
Q24. Which of the following is not an element of fraud?
a. False representation
b. Accidental behaviour
c. Damage to a victim
d. Intentional or reckless behaviour
Q25. Civil law performs which of the following functions?
e. Remedy for violation of private rights
f. Remedy for violations against society as a whole
g. Punishment for guilt beyond reasonable doubt.
h. Monetary reimbursement for federal damages.
Q26. Deceptive manipulation of financial statements describes which
kind of fraud?
i. Management fraud
j. Criminal fraud
k. Stock market fraud
l. Bookkeeping
9
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Short Cases
Case 1
You are having lunch with another graudate student.
During the course of your conversation, you tell your friend
about your new fraud examination class. After you explain
the devastating impact of fraud on businesses today, she
asks you the following questions:
a. What is the difference between fraud and error?
b. With all the advances in technology, why is fraud a
rowing problem?

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Short Cases
Case 2
For each of the following examples, identify whether the
fraud I employee embezzlement, management fraud,
investment scam, vendor fraud, customer fraud, or
miscellaneous fraud.
a. Marcus bought a RM 100 basketball for only RM60,
simply by exchanging the price tags before purchasing
the ball.
b. Craig lost RM750 by investing in a multilevel
marketing scam.
c. The Bank of TISSA-UUM lost over RM 25,500 in 2015.
One of its employees took money from a wealthy
customers account and put it into his own account. By
the time the fraud was detected, the employee had
spent the money and the bank was held responsible.
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Short Cases
Case 2 continued
d. The CEO of XYZ was fined and sentenced to six months
in prison for deceiving investors into believing that the
company made a profit in 2015, when it actually lost
over RM 200 million
e. The government lost over RM40 million in 2015 because
many of its contractors and subcontractors charged for
fictitious hours and equipment on a project in the
Middle East Peninsula.
f. A student broke into the Schools computer system and
changed her grade in order to be accepted into graduate
school.

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Question & Answer

Invite questions from students

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Summary
Discuss topics covered in Part 1
Forensic, Forensic Accounting,
Fraud, Criminality and Civility.
Taxonomy of Frauds , 2015
(transmitted to your portal).
Nature of fraud.
Reiterate welcome
Wrap-up
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End of Class
Should you require further clarifications,
please feel free to see me on
CONSULTATION DAYS at TISSA-UUM
Room 3.58, 04289 7303; or
Email: popoola@uum.edu.my; or
WhatsApp 016 435 4874.
Thank you. Terima Kasih.
Dr. Oluwatoyin Muse Johnson Popoola,
PhD, MBA, CFA, FCTI, FCA, RPA

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