Fraud in the Construction Industry
Explore construction fraud from bidding through project closeout. Identify red flags, assess fraud risk, distinguish intentional misconduct from error and waste, and apply practical detection techniques. Examine how project structure and participant relationships create vulnerabilities, then learn how organizations can investigate suspected fraud, recover losses, improve controls, and respond effectively when misconduct occurs across complex projects.
Format
PDF Course
Course Lists
Duration
13 Hours
Course Information
Author: Steven Bragg
NASBA Category: Auditing
NASBA Category: Auditing
Course Number: AU1048
Not Acceptable For: Enrolled Agents
Not Acceptable For: Enrolled Agents
Learning Objectives
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Recognize the reasons why fraud statistics understate actual fraud levels.
- Recall why construction fraud can impact management decision-making.
- Recognize why the use of a developer can increase fraud risk for an owner.
- Specify the circumstances under which fraud oversight is more difficult.
- Recall the fraud risks associated with project site acquisition.
- Recognize the information needed to minimize time-and-materials fraud.
- Recall the closeout practices that can lead to fraud.
- Recognize the factors that can support participant fraud risk.
- Specify the fraud conditions that can arise on remote international projects.
- Recall why hybrid construction projects require extra scrutiny.
- Recognize the nature of residual fraud risk.
- Recall the different types of bidding fraud.
- Recognize how qualification requirements can be manipulated.
- Specify the characteristics of bid shopping.
- Recall the types of post-award activity that indicate bid rigging.
- Recognize the characteristics of a kickback.
- Recall the different types of improper payments to a decision-maker.
- Recognize the risks associated with repeated small gifts.
- Specify the situations that are considered to be self-dealing.
- Recall how to analyze a related-party transaction.
- Recognize the correct response when asked to make a questionable payment.
- Recall the characteristics of invoices for unsupported professional services.
- Recognize the nature of rate inflation.
- Specify how to identify partial duplicate invoices.
- Recall why service invoices can be difficult to verify.
- Recognize the issues with paying for goods stored at a supplier site.
- Recall how inactive vendor accounts can be used to commit fraud.
- Recognize the controls needed for changes in vendor banking instructions.
- Specify why manual payments should receive a detailed review.
- Recall how approval fraud can arise in an electronic workflow.
- Recognize how to identify an invoice that was created after the fact.
- Recall why continuous payment monitoring is needed.
- Recognize how completion can be overstated under an input method.
- Specify the inputs to examine when reviewing project forecasts.
- Recall the reasons for profit fade.
- Recognize how to identify an aggressive contract asset balance.
- Recall how project meeting records can be used to detect fraud.
- Recognize the types of supporting material needed for a significant forecast revision.
- Specify why historical versions of construction forecasts should be retained.
- Recall how to identify the manipulation of revenue recognition.
- Recognize the characteristics of a negative change order.
- Recall why an unused allowance should be examined during a change-order review.
- Recognize the risks associated with oral change orders.
- Specify how supervisory overrides impact payroll processing.
- Recall the characteristics of overlapping-shift payroll fraud.
- Recognize how the apprentice classification can trigger fraudulent transactions.
- Recall how to prove a claimed amount of reported equipment standby time.
- Recognize the characteristics of delivery-ticket manipulation.
- Specify the conditions indicating the presence of excessive material waste.
- Recall the characteristics of phantom equipment billing.
- Recognize the characteristics of false qualification fraud.
- Recall how unauthorized lower-tier subcontracting can create project risk.
- Recognize the circumstances under which sole-source procurement is reasonable.
- Specify how to identify a staged insurance loss.
- Recall why remediation testing should be used following a control redesign
Instructional Method: QAS Self-Study
Prerequisites: None
Program Knowledge Level: Basic
Program Knowledge Level: Basic
Advance Preparation: None
Latest Review Date: August 2026
Program Registration Requirements: Click on the Enroll button to pay for and access the course. You will then be able to download the course as a PDF file, then take an on-line examination, and then download a certificate of completion if you pass the examination.
Program Refund Policy: For more information regarding administrative policies concerning complaints, refunds, and other matters, see our policies page.
