This website uses cookies to ensure you have the best experience. Learn more

Fraud Essay

1910 words - 8 pages

When fraud is discovered within a business, the initial response is "How could that have happened?" And if audited financial statements were issued the question asked is, "Why didn't the accountants have a clue?" These two questions raise the question of whose responsibility it is to prevent and detect fraud. The cost of fraud to businesses today is mounting, as is the level of concern among professionals.Fraud, according to Webster's New World Dictionary, is the "intentional deception to cause a person to give up property or some lawful right." The Association of Fraud Examiners'(1999) Report to the Nation on Occupational Fraud and Abuse further defines occupational fraud and abuse as "the use of one's occupation for personal enrichment through the deliberate misuse or misapplication of employing an organizations' resources or assets." A third definition comes from the Federal Bureau of Investigation. It defines fraud as "the fraudulent conversion and obtaining of money or property by false pretenses: included are larcenies by bailee and bad checks, except forgeries and counterfeiting" (FBI 1984, p.342). The common thread among these definitions is that fraud is a deliberate deception for the gratification of an individual or group. Fraud requires a theft, often accompanied by concealment of the theft, and the translation of the stolen assets or resources into personal assets or resources. We are concerned here with fraud that may be detected through accountants and managers.Data show that the overall cost of fraud is over double the amount of missing money or assets. As computerised systems become more complex, so is the expected cost of fraud. Approximately one in twenty company failures are attributed to fraud. One of these recent controversial and costly frauds is BCCI in Great Britain (MacErlean 1998, p.43).It is the trusted and valued employee who generally commits business fraud. When frauds are discovered, there is often shock and disbelief that they could have committed such an act. The perpetrator of business fraud could be "the person next door." This person is likely to be a married male with a family, religious affiliation, and above average education (Russell 1995, p. 38) In most cases, offenders do not view stealing from companies as harmful; they may think that the crime was victimless; and they do not view their theft as being devastating or costly to the business. Many frauds occur because the opportunity exists and the perpetrator does not believe he/she will be caught. In many cases the offender has "little or no criminal self-concept and offenders view violations as part of their work" (Hagan 1997, p.319).The role of the accountants in relation to fraud is determined by the overall purpose of the audit - that is to enable accountants to give an opinion on the financial statements. SAS110 requires that accountants should plan and perform their audit procedures and evaluate and report the results thereof, recognising that...

Find Another Essay On Fraud

Insurance Fraud Essay

9921 words - 40 pages TABLE OF CONTENTSINTRODUCTION: Risk and insurance31. THEORETICAL ASPECTS REGARDING INSURANCE FRAUD41.1. What is insurance?41.2. What is insurance fraud?51.3. Types of insurance fraud71.3.1. Motor insurance fraud71.3.2. Property insurance fraud81.3.3. Life and health insurance fraud91.3.4. Marine insurance fraud101.4. Authors of insurance fraud131.4.1. Fraud done inside of insurance companies141.4.2. Fraud done by insurance clients151.4.3. Fraud

Audit Fraud Essay

1915 words - 8 pages What is Fraud? Hall (2013) broadly defines it as “a false representation of material fact made by one party with intent to deceive and induce the other party to justifiably rely on the fact to his/her detriment” (p.97). ISA (NZ) 240 11(a) also defines it as “an intentional act by one or more individuals in the organisation or third parties using deception to obtain unjust or illegal advantage”. Van Peursem, Pratt, & Cordery (2011) indicate the

medicare fraud

1639 words - 7 pages Medicare fraud is a problem of high importance when it comes to healthcare and as the years go by, it is seeming to become more and more rampant. I chose this topic because my parents own a home health care business in Houston and they mentioned Medicare fraud as one of the main things they look out for and try to prevent. Generally, Medicare fraud is a person or company that aims to collect healthcare reimbursement illegally. The most common

Medicare Fraud

707 words - 3 pages In the United States, Medicare fraud costs the taxpayers approximately 60-250 billion dollars annually (Pande & Maas, 2013). Unfortunately, past steps to deter future criminality of this type of fraud have been fruitless. Similarly, identifying healthcare institutions and professionals that commit fraudulent acts are problematic; due to the differences of services provided to patients. An example, general practice doctors may submit a

Charity Fraud

1376 words - 6 pages support with an open heart in order to help others in need. Unfortunately, with this act of kindness we could be creating an environment that is highly vulnerable for fraud perpetrators and fake charity scams. Charity fraud is the intentional act of deception committed by an individual or group of individuals who ask for contributions in the name of a worthy cause. Perpetrators of charity fraud will take advantage of a tragic event to appeal to

Preventing Fraud -

770 words - 4 pages What do we mean when we think of Check Fraud? It’s one of the largest challenges that are facing most businesses and financial institutions. This is due to counterfeiting through desktop publishing and copying to create or duplicate a check. There are several types of check fraud, they are; forgery, counterfeiting and alteration, paperhanging, check kiting. Forgery is when an employee issues a check without proper authorization

Retail Fraud

2180 words - 9 pages of your own belongings. A retail store is just the same, you greet the clients, show them where the new stocks are held, where the sales are, the shoe area and etc. Since we must treat the store as our own home, we must assure that all of the merchandise is treated like your own; this means to avoid theft and fraud. It is not only from our customers that can commit a fraudulent activity, but can also happen internally from our employees. Therefore

Computer Fraud

1582 words - 6 pages Computer Fraud As much as $40 billion are lost every year due to flourishing computer crimes. In 1993 alone, Internet, the world wide system of computer networks, was swindled out of approximately $2 billion, and about $50 million were stolen from various companies such as GTE Corp., AT&T, Bell Atlantic and MCI ( Meyer and Underwood 45). Ironically these same organizations have been collaborating with software manufacturers for an expanded

Worldcom Fraud

1500 words - 6 pages , former WorldCom CEO Bernie Ebbers professed ignorance of the accounting fraud taking root beneath his eyes and fended off a barrage of questions from a federal prosecutor suggesting that the fraud got underway only because the company's plummeting stock price put Ebbers' personal fortune at risk. (Farrell, 2005, para 1). Unfortunately for Ebbers, the grand jury wasn’t ignorant to the facts of the case and found Ebbers guilty on nine counts of fraud

Welfare Fraud

1268 words - 6 pages . Unfortunately, welfare is terribly abused. Some people, who receive that help, use that money for drugs or other things that they do not need. The government should closely monitor each recipient’s transactions, administer spontaneous drug tests, and directly deposit some of that money towards their monthly bills to prevent welfare fraud. Many people understand that welfare is the ability to help people. Investopedia defines welfare as, “A social

Tyco Fraud

3507 words - 14 pages TYCO Contents3About TYCO 5The Fraud 6The Rise of TYCO 7The Fall of Tyco 2002 8Executive' lavish lives 10Discovery of the fraud 11Tyco investigation Timeline 12Charges laid: 13A different kind of corruption case 14Ethical and Legal issues at Tyco 15Theory Applicable: 16Rebuilding Tyco 18Lessons Learnt 19Conclusion About TYCOTyco International is a diversified, global company that provides vital products and services to customers in more than 60

Similar Essays

Fraud Banking Essay

1148 words - 5 pages Corporate Fraud Corporate fraud is the actions of leaders or employees of a business that result in lying to the public and investors about how the company is doing financially. Affecting the share prices is usually a large part of the fraud because good financial statements increases share prices, which increases executive bonuses. The fraudulent actions are usually committed to create personal financial and economic gain for the involved

Mortgage Fraud Essay

855 words - 3 pages Mortgage fraud has been increasing globally harming homeowners, businesses and the economy. New ways to detect and prevent mortgage fraud have been developed to discover and prevent criminals before the fact; rather than after the damage has been done. The article An Insight into the World of Mortgage Fraud in the US and UK by Beverly Houlbrook talks about mortgage fraud and how it is becoming more evident “as economies enter recessionary

Medicare Fraud Essay

927 words - 4 pages Collectively, the Department of Health and Human Services and the Department of Justice work to reduce healthcare fraud and investigate dishonest providers and suppliers. The Health Care Fraud Prevention and Enforcement Action Team recouped almost 3 billion in fraud, this year alone. Also, aggressive strategies exist to eliminate Medicare prescription fraud. Patients abusing or selling painkillers received by visiting several doctors and

Compute Fraud Essay

707 words - 3 pages Computer fraud, which is the act of fraud committed via the use of information technology, is a rising concern globally. The various acts that constitute this white-collar crime have grown quickly in the last century. Additionally, investigating and taking legal action against computer fraud perpetrators requires time, money, and knowledge in computer processes, which has made it significantly harder to identify and prosecute computer fraud