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CFE 2024 EXAM STUDY GUIDE GUARANTEED PASS.
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CFE 2024 EXAM STUDY GUIDE GUARANTEED PASS.
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CFE 2024 EXAM STUDY GUIDE GUARANTEED PASS. Falsified Hours & Salary Schemes The most common method of misappropriating funds from the payroll is the overpayment of wages. For hourly employees, the size of a paycheck is based on two factors: the number of hours worked and the rate of pay. Therefore, for hourly employees to fraudule ntly increase the size of their paycheck, they must either falsify the number of hours they have worked or change their wage rate. Common ways to commit a falsified hours and salary scheme 1) Inflating the number of hours worked 2) Inflating the rate of pay 3) Forging a supervisor's signature 4) Collusion with a supervisor 5) Implementing poor custody procedures 6) Altering a timesheet after it has been approved Fictitious Provider Scheme Corrupt providers or other criminals fraudulently obtain and use another provider's identification information and steal or purchase lists of patients' identifying information. Thereafter, the perpetrator submits bills using the fictitious provider's infor mation to the insurance provider or government health care program for medical services, although no services are performed. Address Similarity Reports electronically compare multiple payments going to the same address. These reports are extremely useful because they might show a payment defalcation or funds going to another insurance company, broker, or fictitious payee. Bad Debt Expense Managers can overstate their company's accounts receivable balance by failing to record bad debt expense. Bad debt expense is recorded to account for any uncollectible accounts receivable. The debit side of the entry increases bad debt expense, and the credit side of the entry increases the allowance (or provision) for doubtful accounts, which is a contra account that is recorded against accounts re ceivable. Therefore, if the controller fails to record bad debt expense, the allowance (or provision) for doubtful accounts will be understated. Systems for safeguarding sensitive and proprietary information should include: * Task force * Security risk assessments * Security policies and procedures * Awareness training * Nondisclosure agreements * Noncompetition agreements * Data classification * Data retention and destruction policies * Data minimization * Security controls * Measures to guard manual file systems * Monitoring of visitor access * Quiet room * Incident response plan The failure to include any of these measures is a poor information security practice that can contribute to the loss of proprietary information. To prevent the loss or misuse of sensitive data or proprietary information, organizations should . . . develop and implement risk -based information -security systems designed to detect and prevent unauthorized access to sensitive information. An information security system requires controls that are designed to ensure that data are used as intended, and such controls will depend on the combination and coordination of people, processes, technologies, and other resources. Off-book fraud A fraud that occurs outside the financial system and therefore has no direct audit trail. There are several kinds of off -book frauds that will be discussed in this book. Skimming is the most common off -book fraud. Skimming The removal of cash from a victim entity prior to its entry in an accounting system. Employees who skim from their companies steal sales or receivables before they are recorded in the company books. Because of this aspect of their nature, skimming schemes are known as off -book frauds; they leave no direct audit trail DRG creep occurs when a hospital or other medical institution deliberately and systematically manipulates diagnostic and procedural codes to increase reimbursement amounts or other forms of funding. In other words, DRG creep is an intentional pattern of upcoding by a hospital or other medical institution. smartcard a plastic card, the size of a credit or debit card, embedded with a microchip. A key advantage of smart cards is that, unlike regular magnetic stripe credit and debit cards, they cannot be easily replicated. Similarly, smart cards cannot be easily counterf eited, which greatly reduces the potential for fraud with in -person transactions. Smart cards include a wide variety of hardware and software features capable of detecting and reacting to tampering attempts and countering possible attacks. If someone tries to tamper with a chip on a smart card, the card detects the intrusion and shuts itself down, rendering the card useless. Steps individuals can take to protect their personal information and prevent identity theft * Do not give out government identification numbers unless absolutely necessary. * Do not carry government identification cards (or numbers) in purses or wallets. * Create complex passwords or passphrases that are at least eight characters in length and co ntain upper - and lowercase letters, numbers, and symbols. * Do not reuse passwords. Use a different password for every website, account, or device. * Never send personal information, such as a password or government identification number, via email. Reputable organizations will not request personal information by email. * When available, use biometric authentication (e.g., fingerpr ints, voice recognition). * Create unique answers for security questions. Do not choose answers containing personal information that is publicly available (e.g., name of high school, mother's maiden name). * Protect computers with strong and regularly upda ted firewall and antivirus software, and promptly install all security updates and patches. * Avoid suspicious websites. * Delete messages from unknown senders without opening them. * Only download software from trusted websites. * Avoid using unsecured, p ublic Wi -Fi networks. * Limit the amount of personal information shared on social media. * Use software to permanently erase all data from hard drives before disposing of computers, smartphones, copiers, printers, and other electronic devices. * Secure phy sical mailboxes with a lock, check physical mail regularly, and instruct the post office to suspend mail during vacations. * Shred all sensitive documents. * Opt out of unsolicited offers for pre -approved credit cards or other lines of credit. * Pay attent ion to billing cycles and review all bills and statements. * Check credit reports regularly. Indicators of Compromise (IOCs) or Indicators of Attack (IOAs) Signs that attackers accessed or are currently attempting to access a system; can include unusual inbound or outbound network traffic, anomalies in user access to network files, or unusual network or computer performance. Abnormal Traffic Either higher or lower than usual, could be an indication that an attacker has gained access to an organization's network and is manipulating traffic by sending malicious software to the network or exfiltrating data from it,The benefits of buying summaries with Stuvia:
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