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Chapter 8.docx

3 Pages
Winter 2013

Course Code
ACC 621
Frank Miller

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Chapter 8
Fraud Risks and Controls
Royal Group – Vaughn, ON, CEO now proven innocent Greg Sobara MPP was on
his board. Fraud over non-disclosure of land deal
Hollinger Inc. – Conrad Black (former Lord of Cross Harbour) Disclosure of kick
back scheme (secret commissions)
Charity frauds (given out receipts of higher value than donations) (religionists,
hockey school, fake college degrees)
Brian Moloney is a famous former gambler from Toronto. Maloney embezzled
more than $10 million from his employer (CIBC) to geed his gambling habit.
Caught by RCMP reviewing flight records
Black’s Authoritative Definition of Fraud Slide
Fraud is a generic term, embracing all multifarious means which human ingenuity
can devide, and which are restored to by one individuals to get advantage over
another by false suggestions or by suppression of truth, and includes all surprise,
trick, cunning…
IIA, AICPA & ACFE joint guidance paper said a fraud is:
oFraud is any intentional act or omission designed to deceive others
resulting in the victim suffering a loss and/or the perpetrator achieving a
Fraudulent financial reporting – very popular
oManipulating, falsifying and altering accounting records or supporting
documents from which F/S are prepared
oMisrepresentation, or intentionally omitting from the F/S events,
transaction or other significant information
oIntentionally misapplying accounting principles related to amounts,
classification, manner of presentation, or disclosure
Different Definitions of Fraud Slide
*maybe on MC
Common characteristics
oIs clandestine (secret)
oViolates the perpetrator’s fiduciary duties to their organization
oIs committed for the purpose of direct or indirect financial benefit to the
oCists the employing organizations assets, revenue or reserves

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