Prevention And Detection Of Accounting Fraud - 2577 Words

Prevention and Detection of Accounting Fraud @@@@@ @@@@ @@@@ @@@ October 21, 2014 Abstract: A client has requested information on the prevention and detection of accounting fraud. The research paper will cover descriptions of types and components of fraud. It will offer suggestions as to who would commit fraud and how it would be detected and prevented. The research paper should provide a general overview of the subject in layman s terms. Introduction The Accounts Payable Manager writes himself a check which he then allocates to a fake invoice. The cashier pockets twenty dollars occasionally without ringing in a sale. The owner of the business fails to report thousands of†¦show more content†¦When the individual falls short of this perceived status they then feel that they cannot share this failure and may succumb to the need to commit fraud. 2) Personal failure, the individual commits fraud to cover a personal failure. 3) Business reversals, problems arises from conditions beyond the control of the individual, such as economic downturns, inflation, higher interest rates. 4) Physical isolation, in this situation the trusted person has no one to turn to. 5) Status gaining, the individual feels that he has to maintain a certain level of status. 6) Employer-employee relations, the individual feels neglected, unappreciated or abused by the organization and commits fraud to extract a measure of revenge (Wells, 2011 pgs 15-16). According to Cressey’s research fraud is only committed if all three stages of the triangle exist. Therefore, there must be a perceived opportunity. This opportunity must exist for fraud to happen and the opportunity will present itself in two areas, general information of the how the business operates, it’s levels of anti-fraud protection, the area’s where opportunity may exist and technical skill. Technical skill is the second requirement; an employee who doesn’t have the expertise will not be able to commit an involved fraud, they may be able to steal money from the till but may not be able to cover up the theft. RationalizationShow MoreRelatedChapter 7 Reading Notes : Internal Control1095 Words   |  5 PagesInternal Control: †¢ Fraud is the act of deception in which a business including employees or management use to receive personal gain. †¢ Fraud occurs based on three aspects and they are based off the fraud triangle. - They include pressure, rationalization and opportunity - Reducing these three key aspects of fraud will reduce the act of fraud in a business †¢ Pressure: - Pressure entails financial pressure, where someone is financially unstable - A financial statement fraud could come directlyRead MoreWeek 1 Acc5561135 Words   |  5 Pagescovered will include: * The effect of occupational fraud and abuse on the company * U.S. governmental oversight of accounting fraud and abuse and its effect on the company Potential corruption schemes to be aware of in the company Recommendation of types of accounting evidence and methods of gathering such evidence to support the financial status review. 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