Why Fraud Is The Most Common Reason - 2077 Words

Fraud is defined as a deliberate misrepresentation that causes a person or business to suffer damages, often in the form of monetary losses through deception or concealment (Albrecht et al, 2014). Occupational Fraud as defined by the ACFE is the use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets (Association of Certified Fraud Examiners, 2012). Traditional fraud triangle theory explains that propensity of fraud occurring in an organization lies on three critical elements, which are Pressure, Opportunity, and Rationalization (Albrecht et al., 2014). Pressure is the driving force behind most fraud being committed (Albrecht et al., 2014). It is†¦show more content†¦Asset misappropriation can be broken down into several â€Å"schemes† (Association of Certified Fraud Examiners, 2012). Revenue and cash receipt scheme which is the skimming or stealing of cash assets before they are been recorded in the accounting record or the theft of merchandise or donated items. Purchase and disbursement scheme which is mainly credit card abuse, and involves using organization credit card for personal use or copying donors card number for illegal usage and fictitious vendor scheme which involves issuing fake receipt to claim payment from the organization. Payroll and employee expense schemes involve the continued payment to terminated workers, overstating employees working hours, and fictitious expenditure fraud. The existence of external fraud is not as common as internal fraud or external theft but occurs in the following forms: fraudulent billing by vendors, which involves double billing, failure to deliver purchases, or price gouging. Financial assistant fraud, involves when financial aid is granted in order to support a project that is actually nonexistent. Sub recipient fraud is the reporting of fraudulent data or program costs to the organization/business that made the award/provided funds for the project. Fraud can been committed at all levels from the CEO, managers, CFO, financial staffs, and fund-raisers (Association of Certified FraudShow MoreRelatedFinancial Fraud Against The Corporation1035 Words   |  5 Pagespremature determination of revenue are by far the most common fraud against the corporation (p.4) Facts and Statistics on Financial Fraud and Embezzlement According to Mitric, Stankovic, and Lakicevic, (2012) financial fraud and embezzlement are clearly two distinct configuration, however share several common characteristics and qualities. Mitric et al. also indicated that company top executives and managers or owners normally are responsible for putting its own company in financial troubles andRead MoreCase Summary : Security Fraud1626 Words   |  7 PagesCase Summary Security fraud is a white collar crime that involves the deception of investors or the manipulation of financial Markets (FBI, 2005). Security fraud is a broad topic that covers many different aspects of white collar crimes that individually can stand as their own form of indictable crime (FBI, 2005). Due to the broad reality associated with security fraud, when considering the different case studies, the Martin Shkreli case was the best option. Mr. Shkreli was a pharmaceutical executiveRead MoreThe Role Of Online Health Records855 Words   |  4 PagesIdentity Theft â€Å"Your identity is your most valuable possession. Protect it.† - The Incredibles Technology in today’s world is forever changing providing individual’s with freedoms they were not able to take advantage of prior to advancements. This can offer many advantages to the average American. The use of online health records is a prime example. Many hospitals are providing online access to a patient’s medical records to provide faster results and quicker response time. Those who receiveRead MoreWaste Management Scandal861 Words   |  4 Pagesone of the most egregious accounting frauds we have seen (SEC). What Mr. Newkirk is describing is a long-standing policy by those at the top of the executive rung at Waste Management to provide their auditors, auditing committee, and the public false and misleading numbers in a variety of ways. First, these highest level executives would set earnings targets without regard to current or recent past results. They would then manipulate the numbers to match the previously set targets. Why? They wishedRead MoreCase Study on Waste Managemnet1329 Words   |  6 Pagesattitude. There are various factors present at WM that are indicative of each of the three fraud conditions. Firstly, the factors present at WM that are indicative of the incentive or pressure to perpetrate fraud are WM paid large audit fees as well as other related fees to the external auditor AA. This incentive causes AA to treat WM as valuable client and agree to compromise with the company to commit fraud. The other factor is the strong interest of the management in employing inappropriate meansRead MoreThe Most Problematic Social and Economic Problem in Today’s Society997 Words   |  4 PagesTheft might just be the most problematic social and economic problem in the US. Identity theft can cause many problems for the victim and the thief, obviously. 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In 1980 the city was hit with corporate frauds and illegal investment practices which lead to the collapse of the banking sector. The banking sector collapse lead to the economic recession. The recession caused problems of increased poverty, social inequality, and crim e. Between 1980-2000 theRead MoreMiniscribe Essay949 Words   |  4 Pages 2. Comment on the internal accounting control of MiniScribe, specifically the reasons for its ineffectiveness in preventing fraudulent financial reports. Internal accounting control is crucial to internal control in a company. Accounting control is the methods and procedures for authorizing transactions, safeguarding assets and ensuring the accuracy of the financial records. I think the most important reasons of the totally failure of internal control to prevent fraudulent financial reports