1. CASH RISK ASSESSMENT

2. Fraud OverviewFraud SchemesWhen & How Fraud HappensOur Approach to Fraud Deterrence Overview

3. Fraud Common in Workplaces  Occupational fraud is the use of ones occupation for personal enrichment through misuse of the employing organizations resources. Nearly 75% of all companies from around the world suffer from fraud 85% of the worst frauds reported were committed by company employees Small business suffer higher fraud losses than large organizations Cash Risk Assessment

4. Cash fraud is more common Cash Risk Assessment  Fraudsters most often target currency, check and money order * Data from ACFE Report to the Nation on Occupational Fraud & Abuse

5. Skimming Cash Risk Assessment  Scheme in which cash is stolen before it is recorded on the organization’s books and records. Employee accepts payment from a customer but does not record the sale

6. Cash Larceny Cash Risk Assessment  Scheme in which cash is stolen from an organization after it has been recorded on the organization’s books and records. Employee steals from daily receipts before they can be deposited in bank

7. Billing Cash Risk Assessment  Scheme in which a person steals his/her employer to issue payment by submitting invoices for fictitious goods/services, inflated invoices or invoices for personal purchases. Employee purchases personal items, submits invoice for payment.

8. Reimbursements Cash Risk Assessment  Scheme in which an employee makes a claim for reimbursement of fictitious or inflated business expenses. Employee files fraudulent expense report, claiming personal travel, nonexistent meals, etc.,

9. Check Tampering Cash Risk Assessment  Scheme in which a person steals his/her employer’s funds by forging/altering a check on one of the organization’s back account, or steals a check the organization has issued to another payee. Employee steals blank checks, makes them out to himself/an accomplice.

10. Payroll Cash Risk Assessment  Scheme in which an employee causes his/her employer to issue a payment by making false claims for compensation. Employee claims over- time for un-worked hours Employee adds ghost employees to the payroll

11. Wire Transfers Cash Risk Assessment  Scheme in which a person steals his/her employer’s funds by fraudulently wire transferring them out of the employer’s bank accounts. Employee causes funds to be wired from company bank accounts to an account controlled by employee or accomplice

12. Disbursements Cash Risk Assessment  Scheme in which an Employee makes false entries on a cash register to conceal the fraudulent removal of cash. Employee fraudulently voids a sale on his cash register and steals the cash.

13. When fraud happens Cash Risk Assessment Pressure Pressure is what causes a person to commit fraud. Eg: Overspending Rationalization Rationalizing involves a person reconciling his/her fraudulent behavior. Eg: Person labels the theft as borrowing Opportunity Opportunity is the ability to commit fraud. The fraudster must believe their activities will not be detected. Eg: Weak internal control

14. How fraud is detected Cash Risk Assessment

15. Our Approach Cash Risk Assessment “STALL” FRAUD S tructure – Internal Controls T rain A udit L earn & Appraise L isten

16. “STALL” Approach - Structure Cash Risk Assessment Setup sound internal controls that prevent or deter fraud Evaluate and appraise the existing internal control Identify loop holes and proactively work to eliminate weak points Structure – Internal Control

17. “STALL” Approach - Train Cash Risk Assessment Train management on effective cash management and anti-fraud controls Train cash management personnel about ways to identify/prevent fraud Advice other personnel on ethics, ways to prevent fraud and whistle-blowing principles Train – Personnel

18. “STALL” Approach - Assess Cash Risk Assessment Perform surprise assessments to evaluate effectiveness of internal controls and presence of fraud/error Provide to management a confidential Risk Assessment Report Provide to management a “Risk Score” computed using the Risk Assessment Model Assess – Records & Systems

19. Risk Assessment Report Cash Risk Assessment Risk Score Number of Receipts Total Receipts Highest Receipt Number of Payments Total Payments Highest Payment Average Cash Level Number of Defective Transactions Target Cash Balance Daily Cash Level Fraud Risk Score Records Accuracy Score Significant Risk Factors Summary Other Disclosures, if necessary

20. Risk Assessment Model Cash Risk Assessment Risk Score Reconciliation Number of transactions with error/fraud Transactions not following internal control Quality of records Accuracy of records Overall Internal Control Setup Management participation

21. Risk Assessment Report Cash Risk Assessment

22. “STALL” Approach – Learn Cash Risk Assessment Learn about the clients internal controls or personnel and provide specific guidance's Continue to appraise management on warning signs and ways to improve internal controls Learn & Adapt – Records & Systems

23. “STALL” Approach – Listen Cash Risk Assessment Provide an avenue for whistle blowers to disclose employee frauds Follow-up on any such disclosures relating to employee frauds Protect and safeguard the identity of whistleblowers Listen – To Whistleblowers

24. Our Service Cash Risk Assessment 12 Surprise Audits with Risk Assessment reports 12 Training Session for Personnel on Ethics and Internal Control 2 Review of overall internal control 2 Session for briefing and educating management on internal control Continuous Maintenance of Hotline for Whistleblowers

25. GET IN TOUCH TODAY: Phone: (044) 28362531 / 32 / 33 Email : lionel@verveindia.com Web : http://www.verveindia.comlionel@verveindia.com