Financial fraudExplain different types of frauds and what actions can be taken at the time of suspected frauds?<\/p>\n
Financial fraud is deliberate financial deception which a fraudster initiates with the aim of personal gain. Most financial scams involve white collar criminals who almost always possess specialized knowhow and criminal intentions. Fraud involves many activities which are different and could range from a simple con theft to fraud involving cheques and identity theft to very complex rackets. Due to its nature and means of propagation, fraud can possibly assume many forms and the fraudsters imagination is seemingly the only limit there can be. The most common types of fraud include;<\/p>\n
Identity\/Banking fraud: This is where a fraudster acquires a victim\u2019s banking details and uses them to access and steal from their bank accounts. It is advisable that one uses the security steps that most electronic banking institutions offer to avoid falling prey to such a scam. Institutions should also regularly update the details of their staff to prevent falling prey to theft from an outgoing member of staff.<\/p>\n
Cheque fraud: This is where a fraudster issues cheques that eventually bounce due to funds in the issuing account(s) being insufficient. Individuals receiving cheques as a form of payment should insist on bankers cheques or decline to accept cheques altogether. Where customers insist on making payment through cheques, it is cautionary to await the clearance of the cheque before releasing any form of service or product to them.<\/p>\n
Payments and Invoices fraud: This is a form of fraud that capitalises on a business\u2019 flawed accounting system. The fraudsters will use this weakness to make payments for invoices for unordered or un-received services and goods. The fraudster can also make a payment to employees who are actually not existent or existing employees receiving excess payments. To avoid such scams, the invoices should be crosschecked against the products or services received and ensure that the payment process involves several people.<\/p>\n
Direct theft: The fraud involves stock handling staff lifting items directly or the payments received being pocketed and the sale either not being recorded or getting deleted. The management should ensure that the importance of the process of checking the stock and the sales is understood by all.<\/p>\n
Cash Collection Schedule<\/p>\n
July August September October November Bad Debts <\/p>\n
Cash Sales \u00a3 6,500 \u00a3 5,250 \u00a3 7,400 A\/C Sales July \u00a3 2,000 \u00a3 16,000 \u00a3 1,400 \u00a3 600 <\/p>\n
A\/C Sales Aug \u00a3 3,000 \u00a3 24,000 \u00a3 2,100 \u00a3 900 <\/p>\n
A\/C Sales Sept \u00a3 4,000 \u00a3 32,000 \u00a3 2,800 \u00a3 1,200 <\/p>\n
Cash Collection Schedule for September<\/p>\n
September <\/p>\n
Cash Sales \u00a3 7,400.00 <\/p>\n
A\/C Sales July \u00a3 1,400.00 <\/p>\n
A\/C Sales Aug \u00a3 24,000.00 <\/p>\n
A\/C Sales Sept \u00a3 4,000.00 <\/p>\n
Total \u00a3 36,800.00 <\/p>\n
Inventory Purchase schedule for September<\/p>\n
Sept Purchases \u00a35,000 <\/p>\n
Ac Payable \u00a316,000 <\/p>\n
Total \u00a321,000 <\/p>\n
Budget<\/p>\n
Income Statement<\/p>\n
Inflows Opening Balance \u00a311,000 <\/p>\n
Cash Collections \u00a336,800 <\/p>\n
Total Cash Inflows \u00a347,800 <\/p>\n
Less Purchases \u00a321,000 <\/p>\n
Gross Income \u00a326,800 <\/p>\n
Outflows Administration expenses \u00a39,000 <\/p>\n
Depreciation \u00a34,000 <\/p>\n
Net Income \u00a313,800 <\/p>\n
b. Cash Budget<\/p>\n
Available Cash Net Income \u00a313,800 <\/p>\n
Add Back Depreciation allowance \u00a34,000 <\/p>\n
Total Available \u00a317,800 <\/p>\n
Capital expenditure Equipment \u00a318,000 <\/p>\n
Dividends \u00a33,000 <\/p>\n
Financed By Bank Loan \u00a38,200 <\/p>\n
Cash Balance \u00a3 5,000.00 <\/p>\n","protected":false},"excerpt":{"rendered":"
Financial fraudExplain different types of frauds and what actions can be taken at the time of suspected frauds? Financial fraud<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-51007","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\n