• AP fraud usually involve fictitious vendors and false invoices

– A dishonest employee who has access to the vendor file and authorizes payment

– May embezzle amounts refunded by vendors

– Human error is still a leading cause of loss

• CD fraud is less sophisticated

– Usually involves check fraud

– Check fraud takes many forms from stealing and passing stolen checks to changing
amounts on legitimate checks or check forgery

– CD fraud is becoming easier and more common with computer duplication technology

Exposure to Loss and Destruction of Resources

• Although the subject of fraud and embezzlement is seductively interesting, resource losses
due to unintentional mistakes and inadvertent errors are as costly as, or more costly than
those caused by intentional acts of malfeasance

– Making payments for incorrect or larger amounts

– Paying the wrong vendor

– Paying the same invoice twice