Payroll Schemes

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Payroll Schemes
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Payroll Schemes
Ghost Employees
Commission Schemes
Workers Compensation
Falsified Wages
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Fraudulent Disbursements

• Check tampering (26.2)
• Register Disbursement (2.7)
• Billing (43.6)
• Payroll (20.3)
• Expense Reimbursement (29.9)

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The Statistics

• Median Loss?
• Found out?
• Who did it?
• What types of firms?

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Payroll Schemes

• Occupational frauds
• Ghost employee schemes
• Falsified hours and salary schemes
• Commission schemes

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Ghost Employees

• What is a ghost employee?
• How can a ghost employee be added to the payroll?
• How can a ghost employees status be verified?
• How can a ghost payroll check be issued?
• How can a ghost payroll check be delivered?

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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

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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

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Falsified Hours and Salary

• Most common overpayment
• How?

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Preventing and Detecting Falsified Hours and
Salary Schemes

• Separation of duties
• Transfers of funds
• Overtime
• Sick leave and vacation time
• Verification
• Timecards

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Tests for Fraudulent Payroll Activity

• Review
• Trend analysis
• Exception reports
• Verification to IRS
• Comparison

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Commission Schemes

• Commission?
• Types?

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Detecting Commission Schemes

• Reports
• Uncollected sales
• Random samples