1.

Lapping

A lapping scheme is a form of accounting fraud whereby stolen or misappropriated cash is obscured by
an employee who alters the accounts receivable. A lapping scheme can be detected by tracing how cash
receipts have been applied to customer accounts. If there is evidence that cash receipts are routinely
being applied to the wrong customer accounts, then there is likely an active lapping scheme in progress.
Companies are capable of preventing lapping by carrying out regular cash receipt audits, and by
separating cashier, as well as billing responsibilities.

2. Window Dressing

Window Dressing in Accounting refers to the manipulation done by the company’s management
intentionally in the financial statements to present a more favorable picture of the company in front of
the users of the financial statement before the same is released to the public. It can be prevented by
carefully evaluating a firm or fund's financial statements and looking for suspicious trades coinciding
with the end of a quarter or fiscal year. These days, new technologies can help uncover many different
infractions and abusive practices. For example, artificial intelligence (AI) is now used in audits to enable
not just spot checks but checks of all transactions. The AI recognizes anomalies on the basis of patterns.
Companies that are able to make their data available for analysis can boost the transparency of their
business and their integrity.

3. Kiting

Kiting is an illegal method of obtaining unauthorized credits in their bank account by using fraudulent
means like issuing a negotiable financial instrument without sufficient bank balance, mentioning a false
amount or date, or misrepresenting already availed credit finance to obtain more funds. The strongest
method for deterring or stopping kiting is observant, alert tellers, and the aid of the computer to detail a
list of all items presented for payment that are drawn against uncollected funds.

4. Collusion

Collusion is a non-competitive, secret, and sometimes illegal agreement between rivals which attempts
to disrupt the market's equilibrium. The act of collusion involves people or companies which would
typically compete against one another, but who conspire to work together to gain an unfair market
advantage. the most effective tool in detecting frauds (of all sorts) but especially those that are difficult
to uncover, like collusion, are anonymous tip lines. Today these anonymous lines can include both a
telephone line and an email address. Both should be monitored by a third party separate from the
organization’s day-to-day operations. Having new vendors in the master vendor file reviewed by two
separate individuals also reduces the risk of collusion

5. Bribery

Bribery is an attempt to influence a business decision by offering some kind of personal benefit to the
decision maker. Bribery exists when a potential beneficiary of a contract suggests that a selection in
favor of him would be related to a reward for the person who has the authority to decide. Bribery
prevention policies and procedures need to be embedded and understood by everyone in the
organization. This is where a good quality anti-bribery training programme is critical. Training needs to
not only help people understand what is and isn't acceptable - it must embed the appropriate behaviors.

6. Kickbacks

Kickback is an unethical payment for obtaining preference over some capable person for any
discriminatory or special treatment for supplying any goods or service or getting any work done. It can
be in cash, credits, goods, preferential allocation, or any other valuable material or service. Kickbacks are
hard to detect but it could be prevented by supplying your company with a detailed overview of the
types of behavior you should watch for in employees and suppliers. Providing a number of effective data
mining techniques that can determine if fraudulent accounts payable activity is taking place. Drafting
policies that define what constitutes conflicts of interest. A multi-pronged approach is your best defense
in combating bribes, corruption, and conflicts of interest.

7. Economic extortion

Economic Extortion is a kind of a fraud where perpetrator (employee) demanding the payment from
salesperson or vendor to influence or make the decision of a company in that favor of vendor. It is a kind
of a threat by an employee or any institution to the vendor to get valuable thing it could be financial or
economic assets or any information which has some value for the perpetrator. Refusal to pay extorter
results in any kind of harm to vendor or ready to prone a loss in business. preventing economic extortion
begins with a comprehensive risk assessment. Companies should become aware of the maximum
potential damage and weigh up the risks and returns. Ultimately, once you know where you’re most
vulnerable you can take targeted action and allocate the necessary resources.

8. Conflict of interest

A conflict of interest involves a person or entity that has two relationships competing with each other
for the person's loyalty. Conflicts of interest can happen both personally and professionally. A conflict of
interest can be prevented by Identifying first the conflict. This includes looking at the nature of the
services the client is interested in, all of the parties involved, and if accepting the engagement may
cause a conflict with other clients or within the firm itself. Next is to evaluate the conflict. Once a conflict
has been identified, it’s important that the necessary steps be taken to evaluate the conflict and if there
are proper safeguards that can be put in place to help mitigate any potential threat . And last is to
consider matters relative to disclosure and consent If a conflict is present, you must disclose details
about the potential conflict and the nature of the issues that may appear.