It’s a Fraud, Fraud, Fraud, Fraud World

Part 1: The Cheating Masses

1. What percentage of revenue does certified fraud examiners estimate was lost in 2002 due to occupational fraud?

a. 1 percent

b.

c. b. 6 percent

d.

e. 10 percent

f.

g. d. 17 percent

h.

2. How long does the average occupational fraud scheme last before being detected?

a. one month

b.

c. b. six months

d.

e. one year

f.

g. d. 18 months

h.

3. True or False: About one in seven fraud schemes lasts five years or more before being detected.

4. Employees tipping off auditors is the most common way companies detect fraud. What is the second most common way companies detect fraud?

a. By accident

b.

c. b. By external audit

d.

e. By internal audit

f.

g. d. By anonymous tips

h.

5. Which of the following do certified fraud examiners consider least effective in preventing fraud?

a. Anonymous fraud reporting mechanisms

b. Ethics training for employees

c. Workplace surveillance

d. Background checks on new employees

6. What is the approximate ratio of male to female fraud perpetrators?

a. 1 to 1

b.

c. b. 3 to 1

d.

e. 10 to 1

f.

g. d. 50 to 1

h.

7. What is the approximate ratio of losses from fraud by male perpetrators to female perpetrators?

a. 1 to 1

b.

c. b. 3 to 1

d.

e. 10 to 1

f.

g. d. 50 to 1

h.

8. True or False: The most common reason fraud cases don’t go to court is because the victim company lacks the evidence to convict the perpetrator.

Part 2: The Cheating Masses’ Role Models

9. What percentage of corporate executives said that in golf they undercount strokes, improve their lie or otherwise participate in activities considered cheating?

a. 10 percent

b.

c. b. 67 percent

d.

e. 82 percent

f.

g. d. 99 percent

h.

10. What percentage of the same executives said they are “honest at golf”?

a. 10 percent

b.

c. b. 67 percent

d.

e. 82 percent

f.

g. d. 99 percent

h.

11. What percentage of the same executives said they hate it when others cheat?

a. 10 percent

b.

c. b. 67 percent

d.

e. 82 percent

f.

g. d. 99 percent

h.

12. What percentage of the same executives said they believed a person who cheats at golf would probably cheat at business?

a. 10 percent

b.

c. b. 67 percent

d.

e. 82 percent

f.

g. d. 99 percent

h.

13. What percentage of the same executives said they are personally honest in business?

a. 10 percent

b.

c. b. 67 percent

d.

e. 82 percent

f.

g. d. 99 percent

h.

Bonus Question

True or False: There’s a sucker born every minute.

Sources: “2002 Report to the Nation: Occupational Fraud and Abuse,” by the Association of Certified Fraud Examiners; April 2002 survey of 401 corporate executives, commissioned by Starwood Hotels & Resorts

Answers: 1. B, 2. D, 3. True, 4. A, 5. C, 6. A, 7. B, 8. False (The most common reasoncited by 30 percent of respondentswas fear of bad publicity.), 9. C, 10. D,

11. C, 12. B, 13. D. Bonus Question: If you answered False, then I have an excellent business proposal for you that involves the multimillion dollar estate of the former King of Nigeria.

How’d You Do?

0-4 correct: “Rather fail with honor than succeed by fraud.”

5-11 correct: “Whomever is detected in a shameful fraud is ever after not believed….”

12-14 correct: “If it sounds too good to be true, it is probably a fraud.”