Debasement

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2. What are the two standard plans including gift?

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Part 10 Corruption

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Pop Quiz What are the two rule plans including pay off?

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Learning Objectives Define defilement. Recognize the four classifications of debasement. Characterize gift. Investigate pay off, coercion, and unlawful tips. Distinguish the two classifications of renumeration plans. Comprehend kickback plans and how they are submitted. Comprehend offer gear conspires and clarify how they are sorted.

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Learning Objectives Describe the sorts of misuse that are conferred at each phase of the aggressive offering process. Be acquainted with the controls and systems that can be utilized to avoid and recognize renumeration. Characterize irreconcilable situations. Separate irreconcilable circumstances from renumeration plans and charging plans. List and comprehend the two noteworthy classifications of irreconcilable situations. Be acquainted with proactive review tests that can be utilized to distinguish debasement plans.

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Corruption Conflicts of Interest Bribery Illegal Gratuities Economic Extortion Purchase Schemes Invoice Kickbacks Sales Schemes Bid Rigging Other

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Frequency of Types of Occupational Fraud and Abuse

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Median Loss of Types of Occupational Fraud and Abuse

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Frequency of Corruption Schemes

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Bribery Offering, giving, getting or requesting anything of significant worth to impact an official demonstration Buys impact of the beneficiary Commercial pay off Kickbacks Bid-fixing plans

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Kickback Schemes Involve accommodation of solicitations for products and enterprises that are either overrated or totally imaginary Involve plot amongst workers and merchants Almost dependably assault the buying capacity of the casualty organization

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Kickback Schemes Diverting business to merchants Vendor pays the kickbacks to guarantee a constant flow of business from the obtaining organization No motivator to give quality stock or low cost Almost dependably prompts to overpaying of products or administrations

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Overbilling Schemes Employees with endorsement expert Vendor submits expanded solicitations to the casualty organization Overstates the cost of real products or benefits or reflect invented deals Ability to approve buys is critical to the plan

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Overbilling Schemes Employees lacking endorsement specialist Circumvent buying controls May get ready false vouchers to make it create the impression that the receipt is authentic May manufacture an endorsement signature or have entry to a confined secret word in a mechanized framework Difficult to recognize since the casualty organization is being assaulted from two bearings

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Other Kickback Schemes Discounts are given in return for fixes Slush reserves Other side of the exchange Funds can be paid from different records or paid as "counseling expenses"

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Detecting Kickbacks Normal controls may not identify kickbacks plans Look for cost expansion Monitor slants in cost of products sold and administrations acquired Often begins little yet increments once again time

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Detecting Kickbacks Look for unnecessary amounts bought Investigate stock deficiencies Look for second rate products acquired Compare genuine to planned sums

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Preventing Kickbacks Assign a worker autonomous of the buying office to routinely survey purchasing designs Make beyond any doubt that all agreements have a "right to review" provision Establish composed strategies forbidding representatives from requesting or tolerating any blessing or support from a client or provider Expressly disallow any worker from participating in any exchange in the interest of the organization who has an undisclosed individual enthusiasm for the exchange Implement a morals strategy that plainly clarifies what despicable conduct is and gives grounds to end if a worker acknowledges a fix or kickback

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Bid-Rigging Schemes All bidders are relied upon to be on a notwithstanding playing field – offering on similar details The more power a man has over the offering procedure, the more impact he can apply over the determination of the triumphant offer Potential targets include: Buyers Contracting authorities Engineers and specialized delegates Quality or deliver affirmation agents Subcontractor contact workers

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Pre-Solicitation Phase Need acknowledgment plans Employee of the buying organization persuades the organization that a specific venture is essential Has the details custom-made to the qualities of a specific provider Trends showing a need acknowledgment plan is happening Higher necessities for stock and stock levels Writing off vast quantities of surplus things to scrap Defining a need that must be met by a specific provider Failure to build up a tasteful rundown of reinforcement providers

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Specification Schemes Specifications incorporate a rundown of the components, materials, measurements, and other applicable prerequisites Set the determinations to a specific seller's abilities Use"prequalification" techniques to kill certain merchants Sole-source or noncompetitive acquisition legitimizations Deliberately composes ambiguous determinations requiring corrections at a later date Bid part Gives a seller the privilege to see the determinations before his rivals get the specs

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The Solicitation Phase Restricting the pool of merchants to browse Bid pooling Fictitious providers Restricting the ideal opportunity for submitting offers Soliciting offers in darken distributions Publicizing the offer amid occasion periods

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The Submission Phase Fraud in the fixed offer process Last offer submitted is the one that is granted the agreement Winning bidder discovers what alternate contenders are offering Winning bidder may see alternate contenders offers before presenting his offer Gets help on setting up the offer

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Detecting Bid-Rigging Schemes Look for: Unusual offering designs Low offers took after by change arranges A huge unexplained value contrast among bidders Contractors who offer last more than once accepting the agreement An anticipated pivot of bidders Losing bidders who get to be subcontractors Vendors with a similar address and telephone number Fewer bidders than anticipated for the venture Projects that have been part into littler ones

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Something of Value Cash Promises of future work Promise of possession in the provider's firm Gifts Liquor and dinners Free travel and lodging Cars and other stock Payment of charge card charges Loans on exceptionally ideal terms Transfers of property

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Other Corruption Schemes Illegal tips Given to remunerate a choice as opposed to impact it Decision made to profit a man or organization yet is not impacted by any kind of installment May impact future choices Economic blackmail "Pay up or the consequences will be severe" Employee requests installment from a merchant keeping in mind the end goal to settle on a choice in the seller's support

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Conflicts of Interest Employee, administrator, or official has an undisclosed monetary or individual enthusiasm for an exchange that antagonistically influences the organization Victim association is unconscious of the representative's partitioned loyalties Distinguished from pay off – in irreconcilable situations, the fraudster favors the receipt in light of his own concealed enthusiasm for the seller Purchasing plans Sales plans

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Purchasing Schemes Overbilling plans Bill starts from a genuine organization in which the fraudster has an undisclosed monetary or individual premium Fraudster utilizes impact to guarantee the casualty organization works with this specific merchant Does not consult in compliance with common decency or endeavor to get the best cost for the business Turnaround deals The worker realizes that the organization is trying to buy a specific resource and buys it himself Turns around and pitches it to the organization at a swelled cost

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Sales Schemes Underbillings Goods are sold underneath equitable incentive to a client in which the culprit has a shrouded enthusiasm Writing off deals Purchases are produced using the casualty organization and credit notices are later issued

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Other Conflict of Interest Schemes Business redirections Siphoning off customers of the casualty organization to the representative's own business Resource preoccupations Diverting assets and different assets for the advancement of the representative's own particular organization Financial revelations Inadequate exposures of related-gathering exchanges to the organization

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Preventing and Detecting Conflicts of Interest Implement, convey, and uphold a morals approach that locations irreconcilable circumstances offenses Require representatives to finish a yearly divulgence explanation Establish an unknown announcing instrument to get tips and protestations Compare merchant deliver and phone documents to representative address and phone records for matches

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