ABSTRACT
Asset misappropriation is a type of occupational fraud where employees abuse their positions to steal or misuse company’s assets. Divided into cash or non-cash schemes, asset misappropriation encompasses fraud involving both asset types and cash. The Report to the Nations surveys seem to indicate that fraud-related issues involving asset misappropriations are further exacerbated by low detection rates: only 15% for internal audits and a mere 4% for external audits. Fraudulent disbursement is a category of cash schemes which is broken down into five types of schemes: billing schemes, payroll schemes, expense reimbursement schemes, cheque tampering, and register disbursements. Payroll schemes happen when an employee fraudulently receives overcompensation. Most asset misappropriation fraud cases tend to fall under fraudulent disbursement schemes, but internal and external audits combined contributed to just 19% of fraud detection. Fraudulent disbursement schemes occur most frequently in manufacturing, health care, education, non-profits, and government industries.
