Detecting occupational fraud: billing schemes

According to a 2004 report by the Association of Certified Fraud Examiners, organizations are estimated to lose 6% of their annual revenues to occupational fraud. Moreover, almost a quarter of all frauds are detected by accident (21.3%), as opposed to internal auditors (23.8%) or external auditors (10.9%). It is imperative that auditors, both internal and external, improve the effectiveness of their audits and detect a higher proportion of frauds. Microsoft Access can be a useful tool in detecting six common red flags of billing schemes. Auditors seeking to improve fraud detection are advised to take advantage of its capabilities. Common red flags include the following: 1. An employee's home address matches a vendor's address. 2. An employee's initials match a vendor's name. 3. Checks are written to "cash." 4. A vendor's address contains a P.O. box. 5. Vendor data is missing. 6. Vendor data is found to be formatted illogically.