Forensics Journal - Stevenson University 2014 | Page 70

FORENSICS JOURNAL

“Nonprofit organizations are by no means immune to fraud losses”
(Greenlee at al. 691). Considering their operating characteristics
and industry conditions, these organizations are more vulnerable to
fraud than their for-profit counterparts. Non-profit organizations are
susceptible to both internal and external fraud, namely in the form of
asset misappropriation, fraudulent financial statements, and recipient
fraud. As part of their fiduciary responsibility, these organizations
should conduct fraud risk self-assessments to gain a better understanding of their general and specific exposure in various functions
and processes, namely internal controls and management oversight.
By developing and maintaining strong internal controls and effective
management oversight, non-profit organizations can safeguard assets
and ensure financial statement integrity. Some of the simplest best
practices can minimize fraud opportunities and improve fraud detection and prevention. Non-profit organizations should also consider
“red flags” and other proven fraud predictors in the fight against
fraud. These organizations may benefit from the use of analytical
methods, commercial software, and other analytical applications that
can detect prospective fraud and avoid the unnecessary related losses.
Even in an atmosphere of trust, non-profit organizations can be more
aggressive in their fiduciary responsibility as they establish and implement best practices, conduct regular fraud self-assessments, seek out
effective fraud detection tools and applications, and consider alternative approaches and resources to actively reduce fraud by limiting the
frequency and amount of related losses.

Kim, Joung Yeon, Dianne Roden, and Steven Cox. “The Composition
and Compensation of the Board of Directors as Predictors of
Corporate Fraud.” Accounting and Finance Research. 2.3 (2013): 142154. Directory of Open Access Journals. Web. 28. Aug. 2013.
Lenard, Mary Jane, Ann Watkins, and Pervaiz Alam. “Effective Use
of Integrated Decision Making: An Advanced Technology Model for
Evaluating Fraud in Service-Based Computer and Technology Firms.”
Journal of Emerging Technologies in Accounting. 4 (2007): 123-137. Web.
Mantone, Joseph. “Like a locomotive.” Modern Healthcare. 34.26 (28
Jun. 2004): 28-30. Business Source Complete. Web. 14. Sep. 2013.\
Nisbet, Robert, John Melder, and Gary Miner. Handbook of Statistical
Analysis & Data Mining Applications. Oxford: Elsevier, 2009. Print.
“Nonprofits Not Immune to Fraud.” EisnerAmper Accountants and
Advisors. EisnerAmper, 22 Apr. 2010. Web. 26 Feb. 2014. http://
www.eisneramper.com/non-profits-fraud-0410.aspx
Keller & Owens, LLC. Preventing and Detecting Fraud in Not-forProfit Organizations. Digital file.
Association of Certified Fraud Examiners. Report to the Nations on
Occupational Fraud and Abuse. Austin: ACFE, 2010. Digital file.
Roehrenbeck, Cybil. “Predictive Modeling: The New Frontier in
Medicare Claims Review. ABA Health eSource. 8.8 (Apr 2012). Web.
8 Sep. 2013.

REFERENCES

Schreiber, Russ. “Fighting fraud with predictive analytics and link
analysis.” Healthcare Finance News. 2012. Web. 8 Sep. 2013.

Fanning, Kurt M., and Kenneth O. Cogger. “Neural Network
Detection of Management Fraud Using Published Financial Data.”
International Journal of Intelligent Systems in Accounting, Finance &
Management. 7 (1998): 21-41. Web. 24 Sep.2013.

Ulmer, Jin, and Kelly Noe. “Embezzlement in the Library.” Journal of
Business Case Studies. 9.2 (Mar/Apr 2013): 157-163. Business Source
Complete. Web. 24 Sept. 2013.

Gallagher, Mark, and Vaughn Radcliffe. “Internal Controls in
Nonprofit Organizations: The Case of the American Cancer Society,
Ohio Division.” Nonprofit Management & Leadership. 12.3 (Spring
2002): 313-325. Web. 27 Sept. 2013.

Worth, Tammy. “Fraud prevention through prediction.” Healthcare
Finance News. 2013. Web. 8 Sep. 2013.

Greenlee, Janet, Mary Fischer, Teresa Gordon, and Elizabeth Keating.
“An Investigation of Fraud in Nonprofit Organizations: Occurrences
and Deterrents.” Nonprofit and Voluntary Sector Quarterly. 36.4 (Dec
2007): 676-694. ILLiad Interlibrary Loan Electronic Delivery. 7 Oct.
2013.

RENITA E. DANDRIDGE-SHOATS is
a graduate student in the Forensic Studies
program at Stevenson University. She
received her B.S. degree in Accounting from
Morgan State University (Baltimore, MD).
She is a Certified Public Accountant and has
worked in the private accounting sector for
several public and private companies.

Grice, Sr., John Stephen. “Fraud Detection in Audits of Not-ForProfit Organizations.” National Public Accountant. 46.1 (Feb/Mar
2001): 10-15. Business Source Complete. Web. 14 Sept. 2013.
Holtfreter, Kristy. “Determinants of Fraud Losses in Nonprofit Organizations.” Non Profit Management & Leadership. 19.1 (Fall 2008):
45-63. Business Source Complete. Web. 13 Sept. 2013.

69