Student health services: a case of employee fraud

The indicators of employee fraud often are not recognized by auditors or their clients until after financial losses have been incurred. Employee fraud costs society hundreds of billions of dollars every year [The Association of Certified Fraud Examiners. (2002). Report to the nation on occupational fraud and abuse. Austin: ACFE], and as such, it is increasingly important for auditors and accountants to have fraud prevention and detection skills. This nonfictional case of employee fraud in a university setting is designed to expose students to several different fraud issues. Topics covered in this case include: an explanation of why people commit fraud; the profile of the typical fraud perpetrator; recognizing red flags that may indicate the presence of fraud; the importance of a strong system of internal controls in preventing and detecting fraud; and audit procedures that may help to detect a skimming scheme. This case is appropriate for use in a first auditing course or a fraud examination course.