Bob, an inexperienced consultant, was hired to replace two experienced managers on an Oracle implementation project. Bob's manager told the client Bob was an Oracle expert to get him the job, despite Bob having no Oracle experience. Bob found irregularities in the purchasing and sales departments that could indicate fraud, such as an expensive lifestyle that did not match the purchasing manager's salary, and shipping unordered products to boost sales numbers. Overall, the case describes potential fraud symptoms but more investigation would be needed to confirm fraud.

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1) You are an internal auditor for a large firm and received a tip through the firm's hotline that a
senior sales representative appears to be living beyond her means. You have reviewed their
company personnel file and searched available public information to gather the following data
about the potential fraud suspect. Do a net worth analysis on these data and show your
calculations. I have also attached a spreadsheet file to the assignment that contains these data
in case you would like to use Excel to do your calculations. You can either show your
calculations in a table in this Word document or attach a spreadsheet file with your calculations
to the assignment. If you do submit a spreadsheet file, name it with your own name and "Q1,"
e.g., "Jim Peters Q1."
1) Read the following scenario and answer the questions that follows it.
Bob was recently hired by a systems implementation consulting firm that helped clients
implement new comprehensive information systems to support all aspects of their businesses.
When Bob was first hired, he went through weeks of training to help him understand the firm's
methods, technology, and culture. The firm looked for people with the right aptitude who had
demonstrated a record of success in previous school, work, or extracurricular activities. They
found that this type of person worked out best for the type of work the firm was paid to do.
Bob's first project involved helping a client implement Oracle, a major, integrated commercial
database application that usually costs several million dollars to purchase and implement. Bob
was not trained in Oracle and found out that he was replacing two managers who were just
removed from the project. The project was running over budget so the firm looked for ways to
get the work done less expensively. Bob, who billed out the lower "consultant's" rate (instead of
the "manager's" rate), was a cheap solution, although it would be tough sell to the client. They
liked the previous managers and felt comfortable with their skill level. Because of the demand for
the Oracle experts, Bob's firm could charge Bob's time at a billing rate $200/hour - expensive, but
less than the client paying for the managers.

2. During the first day on the job, Bob's manager took him out to lunch to give him "the scoop" on
the project and what he would be expecting from Bob. "Bob, this is going to be a very difficult
assignment. You've replaced two skilled managers who the client liked. I know you haven't
been trained on, or actually even seen Oracle before, but you're smart and can come up to
speed quickly. I had to tell the client you were an expert in the software in order for them to
agree to bring you on. If you have any questions, don't hesitate to ask me but definitely don't
look stupid or seem like you don't know what you're doing in front of the client. The client will be
skeptical of you at first, but be confident and you'll win them over. I think the transition will
smooth out quickly. See me if you have any questions. "
Bob was scared to death; but what was he to do? He had to get to work. His immediate tasks
were to map out the processes for the client's purchasing and sales operations. This involved
interviewing managers and looking around the purchasing and warehousing operations and well
as the sales and collections operations. Here are some interesting things he found as he did his
work.
Purchasing operations. ​The head of purchasing was a handsome gentleman named Steve.
Steve was very different from any other employee who Bob encountered while at the client. He
wore expensive suits to work and liked to talk about his clothes with colleagues. He also drove
the latest model BMW and would take the other consultants on the project for rides during lunch.
Bob thought this odd because he didn't think a purchasing manager at this company made
enough money to have these luxuries. Steve also took his relationships with "his" vendors very
seriously. He would spend lots of time "understanding who they were." Some days, Steve was
very supportive of Bob's work but on other days he would seem disinterested and even
combative with Bob.
When Bob informally inquired about Steve's behavior with other employees in the purchasing
department, he was told the Steve had worked for the firm for over 20 years and probably had
accumulated substantial savings and assets. In addition, Bob was told that Steve was a very
dedicated worker and never took vacations. Since the client firm had a policy of paying
employees for unused vacation time, the fact that Steve didn't take vacations would have

3. boosted his income. However, his co-workers stated that they wished Steve would take some
vacations because they believed that the lack of a break was probably causing his mood swings.
Sales operation. ​Jessica was the manager of the Sales Department. She was not college
educated but had a lot of "street smarts." She also was a stressed out single mom struggling to
give her kids the things they needed.
Jessica was cooperative with Bob during the course of their interactions. However, Bob noticed
how periodically there would be huge returns that were stacked nearly to the ceiling in the
warehouse. When Bob inquired about these periodic huge returns, Jessica told him that
sometimes they would ship orders to customers based on past purchasing habits even though
the customer had not recently placed an order. As it turns out, when the customers saw a
delivery at their door someone would just assume they had placed an order and would keep it.
However, other customers would quickly return the supplies. "Was that a good business
practice?" Bob inquired. "Well, we have to make our numbers at quarter's end. You have to do
what you have to do," Jessica replied.
a) For each of the following situations in the case, discuss whether the activities
mentioned constitute fraud or not. Use all the elements of fraud described in Chapter 1 to
supporting your answers.
b)Discuss any and all possible fraud symptoms illustrated by Steve's behavior and how
the behaviors might indicate fraud. In linking the behavior to a possible fraud symptom,
include a discussion of which element of the Fraud Motivation Triangle might be involved.
1) You recently took over as teller for a large regional bank. You are not happy with
the job because you felt you were qualified to be a head cashier. You have an MBA and
some work experience in banking. However, the bank that hired you strongly believes in
promoting from within and wants you to "pay your dues" by working your way up through
the ranks.
You want to rip off the bank to get even and to give you some extra cash to buy a new car
you have been wanting for a while. However, to conceal your thefts you will need to help

4. of bank's head cashier. The head cashier reconciles the cash transactions for each teller
at the beginning of each day. The head cashier reports directly to the bank's branch
manager while you report to the head cashier.
Review each of the five sources of power from the text and the six methods of persuasion
covered in the article you reviewed and discuss whether or not each of these possible
tools to influence the bookkeeper might be useful to you. If you don't think they would be
useful, explain why. If you think they would be useful, explain how you would use them.
Clearly label each tool so you are clear which one you are covering.
1) Review the following case and then fill out the Vulnerability Chart on the page following
the case.
Identity theft is a major problem for most individuals these days. The following is a description of
an actual case that illustrates how fraudsters can use identify theft to make millions of dollars.
The fraud began when Shelia Pastore developed a plan to steal and sell people's personal
information. Shelia had begun to work at a third-party credit-reporting agency that facilitated the
retrieval of credit history data. The firm had outstanding contracts with thousands of companies,
allowing these companies to check on the creditworthiness of potential customers, thus creating
a direct line past the three main credit bureaus. As a customer service representative, Shelia
had obtained access to many confidential access codes used by the firm's clients to gain
approval on credit requests. That is, each client had an access code that allowed it to use the
firm's resources to pull credit reports on individuals.
In early 2010, Shelia began to steal credit reports. She sold this information to members of the
Russian mafia. The Russians would pay up to $75 for one person's information. After some
time, the Russians began to target specific people by providing the two fraudsters with names
and Social Security numbers of people for whom they wanted credit reports.

5. The Russians would use the information to gain access to the victim's bank accounts and other
financial information. The Russians would then take one of more of the following steps with an
individual's bank account and credit card information:
● Deplete the bank accounts of the victims through wire transfers.
● Change the addresses of the accounts so the current information was not sent to the
victim.
● Order new checks to be written against of the victim's bank accounts.
● Order new ATM cards so the money could be taken out in cash.
● Order new credit cards under the victim's name.
● Establish new lines of credit under the victim's name
The most intriguing aspect of the fraud was that Shelia quit working for the firm in early 2011, but
was able to continue to steal the information for an additional two years. Shelia claimed that
most of the access codes she had stolen while working at the firm remained unchanged for the
full two years after she left the company.
Finally, in early 2013, Shelia began to get greedy and her greed led to the detection of fraud.
Perceiving that she needed to make more money, Shelia stole around 15,000 credit reports from
the firm by using the access codes of General Motors. Then from February 2013 to May 2013,
Shelia again stole a large number of names. This time, Shelia used the access codes of Citibank
to steal 6,000 credit reports. Finally, in September 2013, Shelia made what would be his last big
credit report theft. Using the access codes of Comcast, Shelia was able to steal 4,500 credit
reports.
After the theft using Ford's access codes, Equifax, one of the three large credit bureaus in the
United States, began to see the request spikes in GM's account. After the next two large
batches of requests, Equifax decided to investigate further. Equifax found that almost all of the
credit report requests came from computer IP address, and that the requests were done in large
batches of about 100. The location of the IP address was found and a search by federal
authorities turned up a computer and other equipment that were used in the fraud.

6. Requirement - Fill in the following fraud vulnerability matrix for the fraud Shelia and Jake were
perpetrating. Keep in mind that a vulnerability chart is designed to lay out as many alternatives
as possible in each column and not just report the ones cited in the case. A fraud examiner
would create a vulnerability chart at an early stage in the investigation and would not know things
like who the perpetrator was or how they perpetrated the fraud.
1) You are an internal auditor for a dental insurance company. The firm processes claims
for dental services from dentists' offices; determines their validity; and approves or disapproves
the claims. You have received a tip from one of the dentists that your company regularly does
business with that some dentists may be submitting fraudulent claims to your firm. You decided
to review claims activity and had your IT department prepare the Dental Data.xlsx data file for
you to review, which is attached to this assignment in LEO. It contains three worksheets. The
Patient worksheet lists patients unique IDs and their addresses. The Dentists worksheet lists the
dental offices that have filed claims and their address. The Dental Claims worksheet lists all the
dental claims your firm approved for a three-month period in 2013.
You need to review the data in the file and see if you can detect any fraud symptoms. I don't
expect you to be Excel experts and so limit your search to things that you can accomplish by
merely sorting the data in the various worksheets in various ways. However, if you have access
to more powerful software like ACL, feel free to use it.
To help you in the task, here is a description of basic features of a typical dental office.
● Dental offices must have a physical presence to treat patients. Thus, a real dental
office usually has a street address.
● Each dentist office sequentially numbers their own claim forms. However, dentist deal
with a variety of insurance companies. Thus, the claim numbers from a given dentist
to one insurance company should not be sequential unless that dentist office bills the
same insurance company for several different patients in a row, which is unusual.
● There is a natural limit to how much dental work is normally done on a single patient
within a three-month period. Because of the discomfort involved with dental work,
patients normally spread how multiple procedures over time. Also, dentists spread
the procedures out over time so that the patient can recover from one procedure
before they start the next. For example, a dentist would not fill two teeth on opposites
of the mouth at the same time so that the patient can chew food on one side while the

7. other recovers. While multiple procedures can be done at once, the number is still
limited. Generally, very few patients would have more than a dozen dental
procedures done in a three-month period.
● Patients tend to use dental offices near their home. I don't want you to try to do a
detailed analysis of the patient and dentists' addresses because that would be too
labor intensive, but you can scan the files for out-of-state patients.
Required - List any fraud symptoms your find and explain why they are a fraud symptom.
However, these are just symptoms and not evidence. Therefore, I also want you to discuss how
strong a symptom you think each one is and discuss non-fraud alternative explanation for the
patterns you spot. If you believe the symptom is so extreme that there couldn't be a legitimate
alternative explanation, explain this as well.
Frauds can be perpetrated in a rich variety of ways. Some frauds may involve a few, large
transactions (i.e., infrequent or a needle in a haystack) and other may involve many small
transactions over time (i.e., ongoing). Thus, there isn't one best analytical tool for detecting
fraud. For each of the following analytical techniques, discuss whether it would be appropriate to
apply to the insurance case in question 5 and explain why or why not. You are not limited to just
the raw data on which you did the analysis, but also can consider other tools that might help
detect fraudulent claims processed by the insurance company. If you believe the technique
would be appropriate, explain how you would apply it to specific fields in the data