Reference no: EM132475101

Many companies are unaware of unethical and fraudulent transactions. An Association of Certified Fraud Examiners study showed that "two-thirds of all employee thefts involved a fraudulent disbursement by an employee. The most common form of fraud (24.9% of cases) was fraudulent billing schemes (usually this involves the employee having the company issue a payment to the employee by submitting a bill for something that never happened such as nonexistent goods or services, purchases of personal goods by the employee, or inflated invoices)." The following chart shows different types of fraudulent disbursements and the median loss from each.

Category                          Median Loss                             % of cases

Billing                             $100,000                               24.9%

Expense reimbursement    $ 26,000                                 14.5%

Check tampering              $143,000                                11.9%

Payroll                            $ 48,000                                    9.3%

Question 1: How can companies reduce the likelihood of fraudulent disbursements?