2-2-3 response Please Responded
Gindira Kelly Cervantes
Because our business world has become so interconnected through the internet and the use of technology, fraudsters have also become very innovative and developed a wide range of schemes to commit and hide fraud. In order to detect or prevent fraud, we have to stay two steps ahead of the fraudsters and think outside the box. It is not sufficient with “knowing what we know” about fraud and typical fraudulent scenarios. We have to be as innovative or more than the fraudsters. One tool used is automatic pattern recognition. Features are used to make inferences about the data. The advantage of automatic pattern recognition methods is that they can be used to read the data to learn the features of a scam. It is possible to recognize signs of fraud using specific features. Pattern recognition methods are able to identify combinations of a large number of features to detect deviating, possibly fraudulent behavior. I believe this method is very beneficial because it uses algorithms that the fraudsters is likely not aware of. That makes the fraudster unable to cover his/her own track.
According to the textbook, “Fraud detection is the first sign or symptom that a fraud has occurred. It is the process of discovering the presence or existence of fraud. Fraud detection can be accomplished through the use of well-designed internal controls, supervision, and monitoring, as well as the active search for evidence of potential fraud (fraud auditing and related follow-through). However, the results of fraud detection are only symptoms and are not conclusive proof of fraud. Furthermore, the first signs of fraud often do not meet the threshold necessary for predication (the totality of circumstances that would lead a reasonable, professionally trained, a prudent individual to believe a fraud has occurred or is occurring),”(Kranacher & Riley 2019). The textbook goes on to really explain that supervision provided by management can make detecting fraud much easier. I found an article that gave a really great explanation on how you can determine if an individual will commit fraud or not. One of the methods that the article listed in order to eliminate fraud was to deeply know your employees. The article goes on to state that “fraud perpetrators often display behavioral traits that can indicate the intention to commit fraud. Observing and listening to employees can help you identify potential fraud risk. It is important for management to be involved with their employees and take time to get to know them. Often, an attitude change can clue you into a risk. This can also reveal internal issues that need to be addressed. For example, if an employee feels a lack of appreciation from the business owner or anger at their boss, this could lead him or her to commit fraud as a way of revenge. Any attitude change should cause you to pay close attention to that employee. This may not only minimize a loss from fraud but can make the organization a better, more efficient place with happier employees. Listening to employees may also reveal other clues. Consider an employee who has worked for your company for 15 years that is now working 65 hours a week instead of 40 because two co-workers were laid off. A discussion with the employee reveals that in addition to his new, heavier workload, his brother lost his job and his family has moved into the employee’s house. This could be a signal of potential fraud risk. Very often and unfortunately, it’s the employee you least expect that commits the crime. It is imperative to know your employees and engage them in conversation,”(Cg Tax, Audit & Advisory 2021). This is avery important tool to utilize. Just engaging with your employees and knowing them on a personal level will tell you more about a person than anything else will.
Kranacher, J. M., & Riley, R. (2019). Forensic accounting and fraud examination (2nd ed.). Wiley & Sons.
Hello professor and classmates when we talk about digital fraud/cybercrime its basically crime within a network and it is typically done with a computer. Now we do have cybercrimes that include damaging them or spread malware and of course the typical one which is infect the computer and give them a virus. For the two types of cybercrime, I would go with identity theft and credit card fraud as I have known people that have had these two types of crimes happened to them. I believe when it comes to preventing digital fraud within my job industry which is banking protecting bank accounts by separating accounts from business and personal and with us safeguarding our computers would be another way to prevent cybercrimes as only each of us know our passwords and anything else we need to do our job correctly. With internal controls I would choose lock and protect your valuables and reconcile and scrutinize statements every month because I again I work at a bank and these two types of internal control would be ideal for me to use.