CFFE Module I
Fraud and Corruption Schemes cheat sheet
Every chapter's key points, formulas and definitions on one page, for the last week before the exam. Each heading links to the chapter that explains it.
Fraud and corruption schemes: an overview
- Fraud is an intentional act or omission designed to deceive, leaving the victim with a loss or the perpetrator with a gain; intent is what separates it from an honest error.
- Corruption is the abuse of entrusted power or position for private gain, covering bribery, extortion, conflicts of interest and illegal gratuities.
- Occupational fraud is committed against the employer for personal enrichment; organisational fraud is committed by or on behalf of the organisation, for the organisation's own benefit.
- The ACFE Fraud Tree has three branches: asset misappropriation, corruption and financial statement fraud. Place any scenario in its branch before analysing it further.
- Red flags come in three groups: behavioural (living beyond means), situational (weak controls, management override) and organisational (high turnover, poor tone at the top, aggressive earnings targets).
Key terms
- Behavioural red flags
- Living beyond means, financial difficulties, unusually close association with a vendor, control issues, unwillingness to share duties.
- Situational red flags
- Weak internal controls, override of controls by management, unexplained accounting anomalies.
- Organisational red flags
- High turnover, poor tone at the top, aggressive earnings targets.
The rest of the sheet covers
- Financial statement fraud
- Asset misappropriation
- Bribery and corruption
- Theft of data and intellectual property
- Identity theft
- Contract and procurement fraud
- Computer and internet fraud and cybercrime
- Financial institution fraud
- Payment system fraud schemes
- Insurance and health fraud
- Consumer fraud
- Case study: occupational and organisational crimes
- Exam technique and revision
- Glossary