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Payroll Schemes

Payroll Schemes. Payroll Schemes. Ghost Employees. Commission Schemes. Workers Compensation. Falsified Wages. Fraudulent Disbursements. Check tampering (26.2%) Register Disbursement (2.7%) Billing (43.6%) Payroll (20.3%) Expense Reimbursement (29.9%). The Statistics.

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Payroll Schemes

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  1. Payroll Schemes

  2. Payroll Schemes Ghost Employees Commission Schemes Workers Compensation Falsified Wages

  3. Fraudulent Disbursements • Check tampering (26.2%) • Register Disbursement (2.7%) • Billing (43.6%) • Payroll (20.3%) • Expense Reimbursement (29.9%)

  4. The Statistics • Median Loss? • Found out? • Who did it? • What types of firms?

  5. Payroll Schemes • Occupational frauds • Ghost employee schemes • Falsified hours and salary schemes • Commission schemes

  6. Ghost Employees • What is a ghost employee? • How can a ghost employee be added to the payroll? • How can a ghost employee’s status be verified? • How can a ghost payroll check be issued? • How can a ghost payroll check be delivered?

  7. Preventing and Detecting Ghost Employee Schemes • Separation of duties • hiring from payroll • Personnel from payroll and timekeeping • Verification • changes to payroll • In advance of hire

  8. Preventing and Detecting Ghost Employee Schemes • Periodic checking payroll records • Periodic computer reports • Comparisons • payroll expenses to production schedules • Security of signed checks • Verification of distribution

  9. Falsified Hours and Salary • Most common: overpayment • How?

  10. Preventing and Detecting Falsified Hours and Salary Schemes • Separation of duties • Transfers of funds • Overtime • Sick leave and vacation time • Verification • Timecards

  11. Tests for Fraudulent Payroll Activity • Review • Trend analysis • Exception reports • Verification to IRS • Comparison

  12. Commission Schemes • Commission? • Types?

  13. Detecting Commission Schemes • Reports • Uncollected sales • Random samples

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