Fraud: Early Warning Signs of Fraud

The early warning signs of fraud are, usually, always ignored. There are warning signs for every type of fraud out there. To understand the warning signs of fraud, we must first know what fraud is. Fraud is the intent to trick someone or lie to someone in order to receive financial gain. This definition varies depending of the type of fraud used, but the person committing the fraud is always looking for financial gain. There are many types of fraud out there. You have Medicare fraud, internet fraud, mortgage fraud, loan fraud, tax fraud, embezzlement, forgery, insurance fraud, and marriage fraud. These are only a few types of fraud. There are many more types of fraud out there and new types of fraud are being committed every day. This paper will focus on different types of fraud. The different types that will be discussed are physician identity theft, medical identity theft, corporate fraud, inventory fraud, Ponzi schemes, charity scams, miracle cure scams, and identity theft. Each type of fraud will lead into a discussion of what the fraud is, how it happens, what are the warning signs of the fraud, and what you can do to protect yourself.

Physician identity theft is becoming more of a problem every day. This type of fraud can be listed as a sub category under Medicare fraud. Medicare fraud is one of the most well known types of fraud and, “is the purposeful billing Medicare for services that were never provided or received” (1). Physician identity theft can also be listed as a sub category for identity theft. Identity theft is when, “the use of another’s personal information without permission” (1). Physician identity theft can be described as when, “the thief uses the physician’s ID for fraudulent purposes” (2). This can go ...

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...ry then you might want to start asking questions. Cost of goods will have to go up to make back the money that you have lost. This could be a sign of inventory fraud. Your gross margins may decrease significantly. The journal entries may start looking unusual or being done late. Catching the fraud early is the important thing.

Some ways to prevent inventory fraud would be to, “tests for quantities, compilation, and valuation” (12). Put security measures in place for employees. Install security cameras in the store and stock room. Make sure each employee has a separation of duties. All write offs should be approved and verified by a supervisor. Hire an outside inventory firm to do the stock takes. Make sure you let your employers know that fraud will not take place and what the consequences are if a fraud occurs. Also set up ethical standards for your employer.