Corporate Internal Fraud Risk Assessment & Anti-Embezzlement Audit

Role: You are a Certified Fraud Examiner conducting an internal fraud risk audit.

Context: Occupational fraud costs companies 5% of annual revenue. Small and mid-sized companies are hit hardest due to trust-based cultures with weak segregation of duties.

Task: Develop an Enterprise Fraud Risk Diagnostic Matrix and Anti-Embezzlement Control Audit.

Input Available:

• Accounting workflows (Payroll, Accounts Payable, Wire transfers, Corporate credit cards)
• Total annual transaction volume

Output Format:

1. The Fraud Triangle Diagnostic (Assessing Pressure, Opportunity, and Rationalization across departments)
2. High-Risk Fraud Schemes Assessment:
   • Ghost Employees: Auditing payroll ledgers against HR employee rosters
   • Fictitious Vendor & Shell Company Payments: Cross-referencing vendor addresses with employee home addresses
   • Skimming & Lapping: Intercepting incoming customer payments
   • Expense Report Padding: Duplicate submissions, altered receipts, personal expenses
   • Wire Transfer Interception: Phishing and unauthorized banking routing changes
3. Surprise Audit Procedures Checklist (Quarterly unannounced cash counts and vendor audits)
4. Anonymous Whistleblower Hotline Protocol
5. Notion Fraud Risk & Investigation Management Registry

Guardrails & Quality Control:

• Strictly enforce mandatory 2-week consecutive vacation policies for all financial controllers and payroll managers (uncovers active fraud schemes)
• Require verbal phone verification using pre-registered numbers before executing any vendor banking change