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INTRODUCTION TO E-DISCOVERY
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However, there are several potential limitations to the use of data discovered in slack and unallocated space First, it may not always be possible to accurately attribute dates to such information because the normal operating system dates will not typically be available Second, highly fragmented data found in slack or unallocated space may be hard to place in context, and therefore drawing conclusions about the data may be dif cult in some cases Third, it may be hard to attribute data found in slack or unallocated space to a particular user, especially if the computer being examined was used by more than one person Notwithstanding these potential limitations, the ability to review data that has been marked for deletion by a user is one of the key advantages of a forensic approach to the review of electronic data Just knowing that a user attempted to erase certain les prior to the investigation may provide signi cant clues to the investigative team
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Many of the computer forensic techniques described in this chapter were considered exotic just a few years ago, but today they have become routine practices in major investigations Given our society s dependence on computers, it is reasonable to anticipate that ve years from now these procedures will necessarily be performed in virtually every large litigation matter and many smaller ones as well We can also anticipate that new and better tools and techniques will be brought to bear over time Indeed, the only constant in computer forensics is rapid change By making use of the most up-to-date practices and procedures, it is hoped that investigators can stay one step ahead of those who are up to no good
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CHAPTER
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DETECTING FRAUD
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W Steve Albrecht
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Conan C Albrecht
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491 492 493 494
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INTRODUCTION TYPES OF FRAUD FIGHTING FRAUD AN OVERVIEW FRAUD DETECTION THE EARLIEST APPROACHES FRAUD DETECTION THE RED FLAG APPROACH MANAGEMENT AND THE BOARD OF DIRECTORS (a) Understanding Management and Director Backgrounds (b) Understanding Management and Director Motivations (c) Understanding the Degree of In uence of Key Members of Management and the Board of Directors
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RELATIONSHIPS WITH OTHERS (a) Relationships Institutions (b) Relationships (c) Relationships (d) Relationships (e) Relationships (f) Relationships Bodies with Financial with with with with with Related Parties Auditors Lawyers Investors Regulatory
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ORGANIZATION AND INDUSTRY FINANCIAL RESULTS AND OPERATING CHARACTERISTICS
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4910 STRATEGIC FRAUD DETECTION 4911 CONCLUSION
491 INTRODUCTION
Fraud is different from most crimes in that it is seldom observed Traditional crimes usually leave evidence that can be seen For example, if a bank is robbed, there are usually witnesses, physical
From Fraud Examination, First Edition by Albrecht 2003 Reprinted with permission of SouthWestern, a division of Thomson Learning: wwwthomsonrightscom Fax 800 730 2215 Both Steve and Conan Albrecht are professors in the Marriott School of Management at Brigham Young University
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DETECTING FRAUD
money is missing, and the entire episode is often captured on video Similarly, the discovery of a body that is obviously the victim of murder leaves little question about whether a crime has been committed With fraud, however, it is not usually obvious that a crime has been committed Only fraud symptoms or indicators, called red ags, are observed In addition, these red ags can often be caused by nonfraud factors, such as unintentional control weaknesses or missing documents, so signi cant investigation is required before investigators can know for certain that fraud has occurred To detect fraud, managers, auditors, employees, and examiners must learn to recognize these red ags and pursue them until suf cient evidence has been collected Investigators must discover whether the symptoms resulted from actual fraud or were caused by other factors Unfortunately, in many cases, many fraud symptoms go unnoticed, and even symptoms that are recognized are often not vigorously pursued