ABSTRACT
This chapter examines frauds that affect manufacturing, such as those involved with lapses in effective quality assurance programs or compromises in purchasing raw materials and components that meet minimum requirements. It reviews manufacturing frauds that involve what is happening on the shop floor and can be perpetrated distinctly and without fraud occurring in other areas. There are frauds that can happen on the manufacturing floor that do not involve direct asset misuse or abuse. In certain industries, such as metal stamping or the melting of raw metal to create molded products, the waste output, the fragments of precious metal or the leftover not used, has value. A person working in a manufacturing environment where metal bricks or coils are used could not only abscond with the normal waste but in some instances could cause excess waste to be produced, increasing the monetary take on the ill-gotten materials. The organization would then have a lower yield on materials, thus increasing costs.
