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FFA 703 Occupational Fraud: Principles and Practices

INSTRUCTOR

CONTACT INFORMATION

Instructor: Paul E. ZikmundLocation: OnlineOffice Hours: By appointment onlyEmail: [email protected]: 609-216-3048

INSTRUCTOR BIO

Paul E. Zikmund serves as Senior Director Forensic Audit at Tyco International. He is responsible for managing a global team providing fraud investigation, detection and deterrence services to help reduce manage the Company’s fraud risk. He has nearly 20 years of experience in this field and has effectively managed global fraud and forensic teams at various Fortune 500 companies. Paul, who is a Certified Fraud Examiner and Certified Forensic Financial Analyst, designs and implements programs and controls to detect fraud. He manages investigations conducted in response to allegations of fraud, misconduct or abuse occurring within Tyco. Paul also leads Tyco’s fraud risk assessments and fraud awareness training. His years of public and private sector experience includes the investigation of complex financial frauds, conducting forensic audit engagements and fraud risk assessments, and providing litigation support for a variety of industries.

Before joining Tyco International Paul was a Director Litigation Support Services at Amper Politziner & Mattia, LLP, Paul was a Principal, Fraud and Forensic Services at SolomonEdwardsGroup, LLC and a Senior Manager – Enterprise Risk Services with Deloitte and Touche, LLP. Prior to that, he served in a variety of in-house fraud and forensic investigative roles with The Dow Chemical Company, Nortel Networks, and Union Carbide Corporation. He began his career as a Municipal Police Officer, and then a State Trooper and Special Agent with the Attorney General’s Office in the Commonwealth of Pennsylvania.

Paul received a Bachelor of Science degree in the Administration of Justice and a Certificate of Accountancy from The University of Pittsburgh. He continued his education with a Masters of Business Administration at the University of Connecticut a Masters of Accountancy at Auburn University and a Masters of Business Ethics and Compliance from the New England College of Finance. Paul has authored various articles relating to fraud detection, prevention, and investigation. He speaks regularly at seminars and conferences on the topic of fraud and also teaches a graduate level fraud and forensic accounting course at Rider University in New Jersey.

Last Modified: 05/27/10 of 16 © 2010 La Salle University

mailto:[email protected]


Paul is a former Board member of the Philadelphia Chapter of the Association of Certified Fraud Examiners and the National Association of Certified Valuation Analysts Certified Fraud Deterrence Board.

COURSE OVERVIEW

COURSE DATES

Semester dates: TBD

COURSE OUTCOMES

Occupational fraud and abuse is described as the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of one’s employing organization’s resources or assets. Through the use of real-life case examples, this course will illustrate the types of persons most likely to perpetrate occupational fraud, under what conditions fraud might be committed, and the specific schemes used to defraud organizations of amounts ranging from hundreds to millions of dollars.

Topics will include discussions on preventing and detecting a variety of fraud schemes related to the following:

Asset misappropriation schemes Financial Statement fraud Bribery & corruption schemes

REQUIRED TEXTBOOKS AND MATERIALS

TEXTBOOKS/CASES

Corporate Fraud Handbook (2nd Ed.), Wells, Joseph IBSN: 0-471-49121-7

Additional readings to be assigned throughout the course. Material posted to blackboard prior to class. Please check before each class for the schedule of assigned readings.

RECOMMENDED READINGS/WEBSITES

1. www.Acfe.com2. www.Sec.gov3. www.theiia.org4. www.wsj.com



TECHNICAL SUPPORT

Technical support information will be provided by Academic Computing Technology.

COURSE STRUCTURE

Please note that there are three in-class meetings during the semester: these will be held on: [dates here]

All other course work will be done online. When working online, all discussions, assignments, conversations, and postings that are scheduled and due in a week’s time are expected to be completed in that week. The online week runs from midnight on Sunday evening to midnight Sunday evening the following week. If you have a schedule issue, please contact your instructor.

Week 1: Basic Framework

Readings and Audio

Audios: Course Introduction and Procedures

Introduction to Fraud

Text: Chapters 1&2 Introduction to Fraud

Defining Occupational Fraud Overview of Asset Misappropriation Ethics at employee misconduct

Posted Reading: ACFE 2010 Occupational Fraud Report to the Nation

2010 Integrity Survey

Discussion Board (DB) 1. Discuss what you believe prompts employees to commit fraud against their employers.

2. Can organizations prevent occupational fraud ?

Week 2



Week 2Readings and Audio

Audio: Who Commits Fraud and Why

Text: Chapter 3 & 4 Skimming & Cash Larceny Schemes

DiscussionBoard Assignment

Discussion Board: Review the case study in chapter 3involving Dr. Lee. What could the hospital have done to reduce the risk of this happening again in the future?

IndividualAssignment

(L0 2) & (LO 3)

Individual Assignment: Research the Internet for a skimming or cash larceny scheme. Submit a 2 page paper .

Week 3 Check Tampering & Register Disbursement Schemes

Readings and Audio Text: Chapters 5&6

Posted Reading: Altered Payee check fraud article

Discussion Board Question

Review the Wolf in Sheep’s Clothing case study (pages 119-122). What controls failures enabled Marlene Robinson to perpetrate her fraud? How could this fraud be prevented?

Individual Assignment

You’ve been hired as a fraud examiner to investigate a check tampering fraud. An officer manager of a small company is suspected of creating checks made payable to a legitimate vendor when in fact she issued the checks to herself and forged the approval signature of her manager. She used the money to live a better lifestyle and pay family medical bills for her sick child. Provide your investigative plan including evidence needed, interviews to conduct, and legal issues to consider. Would you prosecute her if the fraud is substantiated?



Week 4 Billing Schemes & Payroll Fraud

Readings and Audio

Video: Angela Platt Fraud

Text: Chapters 7&8

Posted reading: ACFE article

DiscussionBoard Assignment Discussion Board Question: How does a company prohibit an employee from creating a

fictitious vendor in the vendor master file and then begin submitting fake invoices for payment?


Midterm Exam

Submit a 2 page paper on the following: Choose two separate billing schemes. Identify the red flags of the schemes. You are an auditor assigned to audit cash disbursements. How would you structure your audit program to detect billing schemes by a procurement manager?.

Series of short answer questions. Chapters 1-8

Week 5 Inventory Schemes & Corruption (Bribery)

Readings and AudioText: Chapters 9 & 10

Posted Readings: FCPA Enforcement Article

Discussion In your opinion, is it wrong for people to pay customers or vendors to gain an unfair



BoardAssignment

advantage?


Submit a 3 page paper that 1) explains the Foreign Corrupt Practices Act (FCPA) and how violating the act constitutes paying a bribe. 2) what can companies do to both deter and detect violations of the FCPA

Summarize your paper in the form of a 4-6 slide PowerPoint presentation.

Week 6 Financial Statement Fraud

Readings and Audio ACFE Video – Financial Statement Fraud Schemes

Text: Chapters 12&13

Posting readings on financial statement fraud

SEC criminal complaint

DiscussionBoard Assignment

Revenue recognition schemes are the most common type of financial statement fraud? Why do you believe these schemes are most common? Identify three ways to detect revenue recognition fraud schemes


Case: You have just been called in to investigate a channel stuffing fraud. What is channel stuffing and how would you investigate this allegation? Prepare a 2 page paper to respond to this question.

.

Week 7 Occupational Fraud Overview and Special Topics



Discussion Board Question

Individual Assignment

Text: Chapter 14

Assigned Readings

What have you learned during this course? What areas interested you the most?

Final Exam – Chapters 9-13

COURSE CONTACT HOURSActivity HoursLecture/Discussion Forum 20.0Individual case study 5.0PowerPoint presentation 2.0Internet Research 5.0Midterm/Final Exam 8.0

PARTICIPATION

1. Active and informed participation in online discussions related to weekly questions and individual assignments.

2. Completion of individual case studies or article reviews and/or searches.3. Critical evaluation and discussion of the case or articles in the online journal.4. Presentation on individual projects via PowerPoint posts to document sharing folder.

PROJECT/ASSIGNMENT DUE DATES

Individual Case Study

Students will be assigned a case study related to the detection and investigation of fraud. Students will evaluate the factors listed within the case study and develop a case plan to investigate the identified red flags. The completed assignment will consist of a written paper and PowerPoint presentation to management outlining the results of the findings.

Weeks 4 & 7– Mid-Term and Final Exams

The midterm and final exams consist of 7 to 10 short answer questions based upon the lectures, assigned readings, textbook, and discussion board questions. Students are permitted to use their notes, books, and



the Internet to answer the questions. Students are not permitted to collaborate with others when completing the exams.

EXPECTATIONS

Student Expectations:

Complete all readings and assignments by Sunday evening midnight. Check the online course material and discussion forum on a regular basis (each week runs from Monday –

Sunday; new material will be available each Monday). Participate actively in both online and in-class discussions. Take initiative to review suggested reading sources and contribute items of interest to course discussions. Contact the instructor immediately if any problems arise that may prevent the student from completing

the above requirements.

Instructor Expectations:

Post all course materials and assignments in a timely manner. Make him/herself available by e-mail and/or online chat for student questions or concerns. Check the course each day and contribute to the online discussion areas. Provide each student with weekly feedback on his or her progress in the course. Grade and return all assignments in a timely manner.

RUBRIC FOR EXPECTATIONS IN ONLINE DISCUSSION QUESTIONS

Provide a breakdown of all graded elements in the course. Rubrics should be provided for each element. For example:

Online and WIMBA Participation 25%Individual assignments 25%Mid-term Exam 25%Final Exam 25%

RUBRIC FOR EXPECTATIONS IN ONLINE DISCUSSION QUESTIONS

Discussion will be graded weekly; scores will be based on the following rubric:

Poor (0 points) Fair (2 points) Average (3 points) Excellent (4 points)

Timely contributions and responsiveness

No timely postingsper question—no credit will be earned for late postings

1 postingper question

2 postings per question 3 or more postings per

question (the first made by Wednesday midnight, on at least two different days) which include the



following:

1 student-initiated topic (approximately 150 words)

2 responses to peers (approximately 50 to 100 words)

Knowledge and incorporation of course content

Provides no evidence that readings were completed and/or understood

Postings have unclear relationship to course material

Provides evidence that lecture material was clearly understood

Provides evidence that lecture material was clearly understood; posts suggest critical thinking and/or synthesis of information

Responsiveness to peers

Responds Inappropriately to peers

Does not respond to other students with thoughtful ideas and opinions

Responds to other students with thoughtful ideas and opinions

Responds to other students with thoughtful ideas and opinions; poses additional questions or discussion

Use of online etiquette

2 infractions against discussion board etiquette

1 infraction against discussion board etiquette

Follows discussion board etiquette as posted in Expectations handout

RUBRIC FOR DISCUSSION SCORING

Your initial posting to discussion topics and your responses to others will be evaluated by the following criteria:

INITIAL POSTING

Integration and Application: Appropriate Writing standards Timeliness of the



synthesis of concepts and principles in the initial response

examples of personal and professional experience in initial response

citations in the initial response

and clarity of the initial response

initial response

The response refers to course materials and reflects an understanding of the assignments and readings for that unit.

Irrelevant comments are not part of the response, and concepts are synthesized and ideas addressed.

Excellent ___.Satisfactory ___.Unsatisfactory ___.

The response addresses authentic and professional examples. This response integrates the course materials with personal relevant experience.

Course materials, concepts, and ideas are applied correctly and insightfully.


The response refers to course resources of resources gathered by the learner to support theoretical insights.

Opinions are welcomed but are labeled opinions and held to a minimum, unless the questions request the learner to discuss personal feelings.Excellent ___.Satisfactory ___.Unsatisfactory ___.

The writing is clear, concise, and easy to understand. The terminology used is appropriate and used correctly. The response is coherent and meaningful.


RESPONSES TO OTHER LEARNERS

Integration and synthesis of concepts and principles in response to other learners

Writing standards and clarity of the response to other learners

Timeliness of the initial response

The other learner’s concerns and ideas are address with respect, and the response refers to the course materials where appropriate. Irrelevant comments area excluded and the response reflects an understanding of the content.


The terminology is clear and concise and the writing is easy to understand and coherent.


The response is submitted on or before the due dates.


RUBRIC FOR ASSIGNMENT SCORING Written Unsatisfactory Basic Proficient Distinguished



communication in unit assignmentsClarity of written communications in weekly unit assignments

The communication is incomprehensible and poorly organized.

Most of the communication is comprehensible, but some areas require interpretation by the other learners. Some poor organization is present.

The communication is comprehensible and easy to understand. Generally the organization is good, and it is easy to follow.

The communication is easy to understand and well organized. Proper citations are included, as needed.

Grammar used in written communication in weekly unit assignments

The grammar is considered unsatisfactory if there are major grammatical errors and they interfere with the reader’s comprehension.

The communication may have a number of major grammatical errors but is comprehensible.

The communication may have a few errors but is easy to understand.

The communication has no grammatical errors.

Audience appropriateness of written communications in weekly unit assignments

There is little evidence of writing for the intelligent professional. Most of the communication includes colloquial expressions, use of first person, and so on.

Some parts of the communication include colloquial expressions, use of first person, and so on.

The communication is thoughtful and written for the appropriate professional audience.

This communication is written for the intelligent professional.

Timeliness of written communications in weekly unit assignments

The assignment was submitted three of more days after the due date.

The assignment is unsatisfactory because it was submitted one or two days after the due date.

The assignment is considered distinguished if it is submitted on orbefore the due date.

Completeness and coherence of a position or hypothesis in weekly unit assignments

The communication ignores relevant content and themes. Theories and research are not present and are used ineffectively.

This communication omits some of the relevant theories and research literature and data. There may be gaps in the coherency of the content and information presented.

This communication covers most of the important content and relates it to theories and the research literature. The data is used to create a coherent argument with few gaps.

This communication covers all of the important content and relates it to theories and research literature. The data is used to create a coherent argument with no gaps.

Use of credible sources in support of communication in weekly unit assignments

The course materials are infrequently referenced; opinions are not clearly labeled.

Most course materials are referenced, and some opinions are identified.

Opinions are clearly identified and, for the most part, materials are referenced.

The communication is concise and complete.



Application of knowledge in unit sources in support of communication in weekly unit assignments

The course materials are infrequently referenced. There is a lack of relationship between the response and the question.

Some references are made to the course materials, but many unlabeled opinions exist.

In general the communication examines and includes materials from the course.

The course materials are synthesized within the communication.

RUBRIC FOR PROJECT SCORINGWritten and oral communications and presentation of project

Unsatisfactory Basic Proficient Distinguished

Clarity of communication both written and oral in the projects

The project is incomprehensible and poorly organized.

Some areas of the project are poorly organized and require additional explanation.

The project is clear and comprehensible with generally good organization.

The project is innovative and well- presented, concise, and easy to understand.

Grammar used in communication in the projects

There are many grammatical errors that interfere with comprehension.

This project has some errors in grammar but is comprehensible.

This project has very few errors and is easy to comprehend.

There are no errors in grammar in this project.

Appropriateness for the audience of the projects

There is little evidence of audience appropriateness; slang and colloquial expressions are included.

Some parts of the project are inappropriate for the audience, and some slang and colloquial expressions are included.

The project is developed for the appropriate audience and addresses the professional with few errors.

The project is developed for a professional audience with no deviations from the topic.

Timeliness of the project and submitted by due date

The project is submitted three or more days after the due date.

The project is submitted one or two days after the due date

******The project is submitted on or before the due date.

Completeness of the projects

The project ignores all or nearly all of the elements of the assignment.

The project addresses most of the elements assigned; however some elements are superficially covered.

The project addresses most of the elements assigned; all elements receive adequate coverage.

The project addresses all of the elements and incorporates innovative ideas.

Insight of the projects

No new insights are presented in the project.

The project presents a few insights that link the course materials to authentic work experiences.

The project presents some insights that link the course materials to authentic work experiences.

The project presents numerous insights that link the course materials to authentic work experiences.



Conciseness of the projects

The project includes irrelevant information and is difficult to comprehend.

The project includes irrelevant information but is comprehensible.

The project contains a minimal amount of irrelevant information and is easily comprehended.

The project contains no irrelevant information.

Use of content knowledge in the projects

The course materials are infrequently referenced. There is a lack of relationship to the project.

Some references are made to the course materials, but a lot of gaps exist in relating the course materials to the project.

In general the project examines and includes materials from the course.

The course materials are synthesized within the project.

Length of project in terms of pages or time

The project fails to meet the time/page restrictions by over 15%.

The project fails to meet the time/page restrictions by up to 15%.

The project exceeds the time/page restrictions by 10% or more.

The project meets all time/page restrictions.

EVALUATION AND ASSESSMENT OF LEARNER PERFORMANCE

The following is a breakdown of all graded elements in the course. Rubrics are provided for each element.

In-class, online and WIMBA Participation 35%Individual journal assignments 15%Capstone PowerPoint Presentation 10%Capstone Project Paper 40%

ACADEMIC HONESTY

A high level of responsibility and academic honesty is expected from our students and it is imperative that a student demonstrates high ethical standards in his/her academic work. Academic dishonesty includes, but is not limited to, submission as one’s own work or material that is not one’s own. Plagiarism from the Web or from any other source is unacceptable and will be dealt with under the University’s policy on plagiarism. Students suspected of academic dishonesty are subject to disciplinary actions. Please refer to the La Salle Student Handbook.

COURSE POLICIES

I understand how pursuing a higher education while working full-time and/or raising a family can be challenging at times. I admire your tenacity and efforts. When things get difficult in this class (or in others) and as deadlines loom ahead, remember that you are working towards a goal that will benefit you and your family for a lifetime! Having said this, please understand that we must adhere to established guidelines of high academic standards and



communication procedures. Some of these standards and procedures are outlined below. Please refer to the syllabus for additional course expectations.

LATE WORK POLICY

Simply stated, the policy is that you do not want to submit late work.

It is important to be familiar with this instructor's late work policy. Lesson assignments are due on Sundays, before midnight. Late assignments will not receive credit unless approved by the instructor because of extenuating circumstances.

An assignment is considered a week late even if it is turned after Sunday, midnight. This applies because all work for the week is due before Sunday, midnight. Therefore, turn in your work on time to avoid late penalties, to avoid stress, and to get the most from the learning resources.

No credit will be given for any late threaded discussion posts or late final assignments. The rationale underlying this policy is that since the threaded discussions are a central part of the class, student participation is necessary (and required) during the current week of each lesson. Consequently, students must post their reply to the threaded discussion question(s) and reply to at least two classmates' posts during the week of the relevant unit in order to be eligible for credit. As for any final assignments, external deadlines prevail so flexibility is not an option.

In the event that an assignment is turned in late, you are required to notify me by -mail that the work has been completed. At my earliest convenience, I will then consider the late work and update your grade, as appropriate.

COMMUNICATION

Please be aware when you e-mail me with a question or concern to allow 24 hours for a response. In most cases the reply will be much sooner. I believe that prompt and relevant feedback to your questions, concerns, and posts is of extreme importance.

Concerning e-mail, you must put your NAME on the e-mail and YOUR CLASS AND THE ASSIGNMENT OR ISSUE YOU ARE REFERRING TO IN THE SUBJECT LINE OR the reply may be delayed. Please comply with this request to ensure a prompt response from me.

Furthermore, feel free to post questions in discussion threads, but address them specifically to me so I know it's something you want me to look at as soon as possible. Another mode of communication is the main chat room in the course, which allows us to chat in "real-time" during a mutually-arranged appointment. Alternatively, my office hours will be clearly identified at our first class.

I am also available on a case-by-case basis to meet individually with you.



ETIQUETTE

Please understand that there is a certain type of etiquette that must be upheld in the class when posting in discussion areas and when turning in college work. To this end, refrain from slang, derogatory language, caps, and any potentially offensive forms of expression. Hence, when you approach your instructor or other students with questions or comments, you should always maintain a professional tone.

DISCUSSION BOARD TIPS

Most times you will be replying to the same topic each week. You will stay within the thread to keep the conversation threaded. This does not mean you cannot start your own topic within a topic. If so, start your own with a unique topic.

Keep your responses short and to the point. Remember, everyone needs to read all of the posts. Try to keep within two paragraphs.

Be articulate as you can, and at the same time exercise brevity. If you want to post something with more than one point, break it up into two posts. This will allow

someone to reply to only one point. If you post a comment and it does not sound the way you expect it to, go back and respond to your own

post to clarify your point. Go ahead and address someone personally. This is great for creating a sense that you are really

“speaking” to that person. In fact, it helps all the readers follow the threads in the discussions easily. Feel free to be funny. Everyone likes humor—especially if you are relating to a personal experience. Paste Web links into your message to help prove a point or bring attention to a new way of thinking. Just a

word of caution: don’t depend on Web links to prove your point, use it as supporting information only. You should always be involved in the discussion drawing from your own knowledge base and your own experiences.

Be aware of your tone—irony doesn’t always work it could be completely misinterpreted. The professor and your classmates cannot see your facial expressions online, and your comment may be taken the wrong way.

Your posts should be full sentences. Do not use the new IM language derived from writing instant messages on the Web. Not everyone understands the IM language. Besides your discussion responses are to be thoughtful and critical observations about the subject matter.

Only use caps for emphasis; otherwise it may sound as if you are yelling. Be aware of spelling and grammar. Use the same standards that you would in the classroom. Criticize the idea, not the person. Be constructive in criticism and offer alternatives.

GRADES

Grades will be posted within one week after the scheduled due date. Grade book questions should not be asked before the one-week window.

ASSIGNMENT SUBMISSION

Please be certain to turn work into the appropriate area under the appropriate title.


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