INTHEBLACK April/May 2024 - Magazine - Page 28
F E AT U R E
“The auditor should seek patterns such as consistent overtime claims, rounding of
figures, multiple employees having the same banking details, multiple employees
having the same or a similar address. These are red flags that indicate fraud.”
MICK SYMONS, ACCA
all evidence before confronting the
“offender”. Evidence may include time
sheets, payroll records, bank statements,
communication logs, mobile phone
records for company-issued phones
and any other pertinent documentation
to support suspicions.
“Some fraudsters may have introduced
a program to let them destroy any records
within the computer system,” Symons says.
“You may need the assistance of computer
forensic experts.
“It may be appropriate, where applicable,
to speak with legal advisers to determine
a course of action. You must investigate
with procedural fairness as your actions
may be subject to scrutiny by an
external agency.”
TYPES OF PAYROLL FRAUD
MATCH EACH TYPE OF PAYROLL FRAUD TO ITS DEFINITION.
BUDDY
PUNCHING
COMMISSION
SCHEMES
EXPENSES/
BENEFITS FRAUD
GHOST EMPLOYEES
MANIPULATION
OF PAY RATE
UNAUTHORISED
OVERTIME
1. This is a more sophisticated form of fraud that often involves salaries
being disbursed to “employees” who do not exist in the company.
These could be fictitious employees or former employees whose payroll
records have not been terminated. It can also involve using the names of
current casual employees to fabricate hours being worked within a business
and then making payments based on those falsified casual hours into a third
party’s bank account. This type of fraud is commonly linked to businesses
involved in outsourced labour hire and with large casual workforces, and it
normally involves people with ready access to payroll records.
2. This occurs when employees, either by manipulating time records or
through deceit, claim overtime for hours not worked.
3. Employees claim benefits for fake or inflated personal expenses. This may
include travel expenses, use of a company credit card, use of a company
vehicle, or any extra benefit provided to an employee.
4. This occurs when commission is paid on contracts obtained, sales, or other
activities directly linked to their duties. Fraud occurs when inflated sales and/or
inflated performance figures are provided to obtain higher commissions.
5. Occurs when an employee (in liaison with someone in the human resources
or payroll department) changes their pay rate, leading to higher salaries.
6. This is common in businesses where there is a requirement to record hours
worked by clocking in and out of work physically or logging in and out
of computer systems digitally. Perpetrators generally get other employees
to impersonate them, so it appears they have attended work (and are
paid accordingly) when they are absent.
CHECK YOUR ANSWERS
28 INTHEBLACK April/May 2024
