Management and Organizational Studies 3367A/B Chapter 7-8: Ch7&8
Document Summary
Employees who engage in this fraud seek to have the company pay for their personal expenses. Employees pad the amount of business expenses they have incurred in order to generate excess reimbursements. Four ways to abuse this process to generate fraudulent reimbursements: mischaracterized expense reimbursements. Claim personal expense as its business related. Very costly (however ranked second least costing in median loss) Organization should require detailed expense reports that include original support documents, dates and times of business expenses, method of payment, and descriptions of the purpose for the expenses. A direct supervisor of the requestor should review all travel and entertainment expenses. Organizations should establish a policy that clearly states what types of expenses will and will not be reimbursed, that explains what are considered invalid reasons for incurring business expenses, and that sets reasonable limits for expense reimbursements. Organizations should scrutinize any expense report that was approved by a supervisor outside the requestor"s department.