Corporate Fraud Handbook

by Mark Rowe

Author: Dr Joseph Wells

ISBN No: 978-1-119-35198-6

Review date: 28/11/2023

No of pages: 432

Publisher: Wiley

Publisher URL:

Year of publication: 22/06/2017




There’s a call here as in other fields of criminology for a link of ‘the theorist with the practitioner’; and former FBI man Dr Joseph T Wells has done that, as the sheer fact of his book has reached five editions, after the first in 2004 and fourth in 2013.

A variety of petty crimes and other counterproductive behavior that have become common, and are even silently condoned, in the workplace. Good workers (so-called) can turn bad. As the latest, fifth edition of a ‘Corporate Fraud Handbook‘ soon shows, there’s more to a fraud than the theft; human psychology, morals, are involved, such as personal integrity, and the gaining and betrayal of trust.

Wells is as at home among the theories for how and why some people do fraud and not others – the ‘fraud triangle’ of need, opportunity and rationalising the wrong away – as he is among the reality of cases, which practitioners may want to turn to most. Wells also is frank enough to admit when he did workplace fraud; when working through college, as a sales person in a clothing store. As he sets out, he stole to ‘get even’ like other staff, after the employer humiliated him. Although Wells does not say so outright, some of the stealing made no sense – he and others even stole a large display case. Wells does well to show that fraud, abuse of trust, need not be purely for someone to better themselves – whether materially or in terms of status, as perceived by the wrong-doer. Where the employees feel an (unspoken) bond between them and the employer is broken – or never existed, there can lie the basis of fraud. Wells does air this: “Much has been written recently concerning the downsizing, outsourcing, and increased employee turnover in business. If the employee of the future is largely a contract worker, much of the incentive of loyalty toward organizations could be lost. Such a trend seems to be underway, but its real fraud impact has not been determined.”

The lack of study of fraud, or ‘occupational offences’ – why some do it and not others, when and where they do it, why a fraudster steals a large or small amount, or even simply how much of the crime there is around (which may be impossible to put a figure on, Wells admits) – has bedevilled fraud prevention and detection, because as with any crime, if you can’t measure it, you can hardly justify devoting resources to it, compared with everything else. “Considering its enormous impact, relatively little research has been done on the subject of occupational fraud and abuse,” as Wells writes; and in his ‘Corporate Fraud Handbook’, Dr Joseph T Wells goes a long way to rectifying that, in a well-written, learned work, that’s reeking with experience and understanding.

The book covers plenty of ground, including the founding of the ACFE and its CFE qualification, that arose out of a need that Wells and others saw for a ‘hybrid profession’ to counter sophisticated frauds that police were not equipped to; with skills in accounting, but also investigation; ‘someone as comfortable interviewing a suspect as reading a balance sheet’. Not the least of Wells’ messages is that fraud can come in any part of any business, from inventory to marketing, anywhere that has a budget. While everyone can do fraud – young and old, long-standing or new staff, men and women – a particular risk is in small businesses, it seems, where one employee does all the accounting, writes cheques, and reconciles the accounts (which takes us back to trust; and yet, as Wells points out, nor can commerce in general go on without trust).

How does a fraud come to light? Sometimes by internal audit or management review, or even by accident; but most often by a tip-off. What works against fraud? Not necessarily lots of security and control measures, Wells suggests; that may even be counter-productive. For one thing, you may usefully look to the underlying causes, such as the grudges of employees. Again, Wells hints at how fraud is bound up with business and organisations in general, another reason why the book deserves an audience among more than security and counter-fraud specialists.

About the author: Dr Joseph T Wells is the founder of the US-based Association of Certified Fraud Examiners (ACFE).

To read more from thr ACFE, visit

Table of Contents


About the ACFE

Chapter 1: Introduction

Defining “Occupational Fraud and Abuse”

Research in Occupational Fraud and Abuse

2016 Report to the Nation on Occupational Fraud and Abuse


Chapter 2: Introduction to Asset Misappropriations


Definition of “Assets”

How Asset Misappropriations Affect Books of Account

CHAPTER 3: Skimming

Skimming Data from the ACFE 2015 Global Fraud Survey

Unrecorded Sales

Understated Sales and Receivables

Theft of Checks Through The Mail

Short-Term Skimming

Converting Stolen Checks

Concealing The Fraud



Chapter 4: Cash Larceny


Cash Larceny Data from the ACFE 2015 Global Fraud Survey

Incoming Cash

Cash Larceny from the Deposit

Miscellaneous Larceny Schemes



Chapter 5: Check Tampering


Check Tampering Data from the ACFE 2015 Global Fraud Survey

Forged Maker Schemes

Intercepted Checks

Forged Endorsement Schemes

Altered Payee Schemes

Concealed Check Schemes

Authorized Maker Schemes



Check Tampering Red Flags


Electronic Payment Tampering

Chapter 6: Register Disbursement Schemes


Register Disbursement Data from the ACFE 2015 Global Fraud Survey

False Refunds

False Voids

Concealing Register Disbursements



Chapter 7: Billing Schemes


Billing Scheme Data from the ACFE 2015 Global Fraud Survey

Shell Company Schemes

Non-Accomplice Vendor Schemes

Personal Purchases with Company Funds



Chapter 8: Payroll and Expense Reimbursement Schemes


Payroll Scheme Data from the ACFE 2015 Global Fraud Survey

Payroll Schemes

Detection of Payroll Schemes

Prevention of Payroll Schemes

Expense Reimbursement Data from The ACFE 2015 Global Fraud Survey

Expense Reimbursement Schemes

Detection of Expense Reimbursement Schemes

Prevention of Expense Reimbursement Schemes

Chapter 9: Inventory and Other Noncash Assets

Overview: Noncash Misappropriation Data from the ACFE 2015 Global Fraud Survey

Misuse of Inventory and Other Assets

Theft of Inventory and Other Assets




Misappropriation of Intangible Assets


Chapter 10: Bribery


Corruption Data from the ACFE 2015 Global Fraud Survey

Bribery Schemes

Something of Value

Economic Extortion

Illegal Gratuities



Anti-Corruption Legislation

Chapter 11: Conflicts of Interest


Purchasing Schemes

Sales Schemes

Other Schemes




Chapter 12: Accounting Principles and Fraud


Fraud in Financial Statements

Major Generally Accepted Accounting Principles

Responsibility for Financial Statements

Users of Financial Statements

Types of Financial Statements

Sarbanes-Oxley Act

Financial Statement Fraud Data from the ACFE 2015 Global Fraud Survey

Chapter 13: Financial Statement Fraud Schemes


Defining Financial Statement Fraud

Costs of Financial Statement Fraud

Methods of Financial Statement Fraud

Detection of Financial Statement Fraud Schemes

Deterrence of Financial Statement Fraud

Chapter 14: Occupational Fraud and Abuse: The Big Picture

Defining “Abusive Conduct”

Measuring the Level of Occupational Fraud and Abuse

Understanding Fraud Deterrence

Corporate Sentencing Guidelines

Ethical Connection

Concluding Thoughts

Appendix: Sample Code of Business Ethics and Conduct




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