Fraud and Forensics Part 1 CCIQ eWorkshop 10 February 2016

eWorkshop Presenter Qualifications Bachelor of Economics, UQ Bachelor of Business (Accountancy), QUT Graduate Certificate in Business (Forensic Accounting), QUT Chartered Accountant Registered Company Auditor Registered SMSF Auditor Experience Over 20 years accounting experience Over 15 years audit experience Bernard Whebell CA Partner, Ulton

Today’s eWebinar BEGIN END HAND OUTS I WHAT IS FRAUD II WHO COMMITS FRAUD?  III THE COST OF FRAUD IV WHY COMMIT FRAUD V PROFILES & EXAMPLES VI

What is Fraud? AS Fraud and Corruption Control: “ Dishonest activity causing actual or potential financial loss to any person or entity including theft of moneys or other property by employees or persons external to the entity and where deception is used at the time, immediately before or immediately following the activity.

The Cost of Fraud 5 $1.25 Billion $2.2 Billion $1.65 Billion $775 Million $3.02 Billion $6.05 Billion Homicide Various Thefts Burglary Arson Assualt Sexual Assualt $3.16 Billion Drug Abuse $2.27 Billion Fraud $2.73 Billion Criminal Damage

Who Commits Fraud? Source: KPMG Australia 2013

Who Commits Fraud?

Source: KPMG Australia 2013

Who Commits Fraud? Major Frauds by Perpetrator

Who Commits Fraud? Source: KPMG Australia 2013 Major Frauds by Age

Case Study 2 John is head chef in a hospital kitchen. The kitchen serves 1,000 meals per day. Before John started working in the Kitchen the Hospital would throw out approx 5 trash cans of food per day. In the interests of limiting wastage and improving morale John has allowed his team to share any leftover food between them. Fraud Risk?

Why Commit Fraud?

Pressure Drug or gambling addiction PRESSURE: This is what motivates the crime. The individual has some financial problem that he is unable to solve through legitimate means so they begin to consider committing an illegal act as a way to solve the problem. Inability to pay bills Productivity targets at work Investor expectations Maintain or improve status

Pressure

Mum stole credit card to buy Christmas presents for kids Gladstone Observer | Melanie Plane | 2nd Feb 2015 Woman steals $164,000 from group Sunshine Coast Daily | Rae Wilson | 29th Aug 2008

Opportunity OPPORTUNITY: Opportunity defines the method by which the crime can be committed. The person must see some way they can use (abuse) their position of trust to solve their financial problem with what they perceive to be a low risk of getting caught..

Opportunity John is head chef in a hospital kitchen. The kitchen serves 1,000 meals per day. Before John started working in the Kitchen the Hospital would throw out approx 5 trash cans of food per day. In the interests of limiting wastage and improving morale John has allowed his team to share any leftover food between them. Fraud Risk?

Rationalisation RATIONALIZATION: The vast majority of fraudsters are first-time offenders with no criminal past they do not view themselves as criminals. They see themselves as ordinary, honest people who are caught in a bad set of circumstances. Consequently the fraudster must justify the crim to themselves in a way that makes it an acceptable or justifiable act.

Rationalisation Cairns principal sentenced over defrauding Queensland and federal governments of nearly $3.5m - Sharnie Kim | 3 Oct Six years’ jail for taking $670,000 from former employer Janessa Ekert | 8th Dec

Types of Fraud PriceWaterhouseCoopers: Global Economic Survey 2014

Technology and Fraud PERF ECT FOR TAGS Creat ivity is the key to succ ess in the futur e, and prima ry educ ation. SEAR CH SEO Creat ivity is the key to succ ess in the futur e, and prima ry educ ation. SOCI AL LIKE Creat ivity is the key to succ ess in the futur e, and prima ry educ ation. Identity Theft Ransomware DDoS Attacks Theft of Intellectual Property – BYODs Social Engineering Drive-By-Downloads Spam and Phishing

Red Flags

Questions Do you have any questions? Please send through your questions for Bernard by typing these into the question box.

Thank you If you suspect fraudulent activity in your business then why not take the red flag test? Join us on the 3rd March 2016 for the ‘Prevention of Fraud’ e-workshop, which will discuss steps to take if you have identified fraud as well as ways to prevent it. If you have any other questions or wish to discuss any concerns you have, please feel free to contact Bernard Whebell. Bernard Whebell - Partner T: / E: W: ulton.net