Ghost Employee
Definition
A fictitious or terminated worker whose record remains active on the payroll master file. Wages are disbursed under that record and diverted to the fraudster. The scheme requires the ability to create or retain payroll records and, usually, to redirect payment to a controlled account.
Related terms
- Cash Larceny
- Taking cash that has already been recorded in the accounting system. The record exists, so the theft creates a provable discrepancy between...
- Commission Manipulation
- Inflating the value, volume, or classification of sales transactions to generate a larger commission payout. Methods include recording fictitious sales, misclassifying non-commissionable...
- Fictitious Inventory Write-Off
- A journal entry that reduces the recorded inventory balance under a legitimate category (obsolescence, spoilage, shrinkage) without an actual loss of stock....
- Fraudulent Disbursement
- A scheme in which the perpetrator manipulates the organisation's outbound payment process to divert money to themselves or an accomplice. The main...
- Headcount Reconciliation
- A detection procedure that cross-references every record on the payroll register against HR personnel files, building access records, and direct management confirmation....
- Inventory Shrinkage Rate
- The ratio of inventory loss (the difference between book inventory and physical count) to total inventory, expressed as a percentage. Comparison of...
- Lapping
- A scheme to conceal the theft of cash from customer receipts by applying a later customer's payment to the earlier customer's account....
- Segregation of Duties
- The principle that the authorisation, custody, and recording of any transaction should be performed by different people. Its absence is the single...
- Skimming
- An off-book cash theft: revenue is stolen before it enters the accounting system, so no entry is ever made. Skimming is harder...
- Timesheet Fraud
- The falsification of hours worked, rates of pay, or attendance records to generate a larger payroll payment than is legitimately owed. Includes...
Explained in these topics
- Asset Misappropriation and SkimmingA fictitious or departed person on the payroll whose wages are diverted to the perpetrator. Detection relies on headcount reconciliation, supervisor attestatio...
- Payroll and Inventory Fraud SchemesA fictitious or terminated worker whose record remains active on the payroll master file. Wages are disbursed under that record and diverted to the fraudster....