Suggest how a financial forensic investigation could have detected fraud in the organization that you…
The accounting profession will always shed light on how much of a debacle the Enron fraud turned out to be. The Enron Corporation was once a high-profile business based out of Houston, Texas that operated one of the largest natural gas transmission networks in North America. According to the Texas State Historical Association, not only were they the largest marketer of natural gas and electricity, but they also managed contracts and pioneered innovative trading products. This mega company was one to top the Forbes list, not one or two years, but six years in a row.…
Macy’s sympathizes with the customers for the harm that was caused due to the data breach, and the company wants to reassure that Macy’s is a reliable company in which customers can trust because Macy’s will always be there for them.…
The amount listed is the enrollment agreement was 10,020.00 which gives a difference of :…
Each impact the company in various, but even the petty thefts can add up. According to the 1996 Report to the national on Occupational Fraud and abuse, The key is that the activity 91) is clandestine, (2) violates the employee's fiduciary activity, (3) is committed for the purpose of direct or indirect financial benefit to the employee, and 94) costs the employing organization assets, revenues or reserves." (2002 Report to the Nation) Fraud involves three points that make up the hypothesis, opportunity, pressure and rationalization. The early works of Edwin H. Sutherland is the basis of current literature. Sutherland was interested in the elite upper-world business executive, which was against shareholders or the public. Donald R. Cressey, who was a student at Indiana University with Sutherland, concentrated on those who embezzled. Dr. W. Steve Albrecht was instrumental in creating the certified fraud…
Dishonest employees are a major factor in business losses. In 2013, 78,085 employees were arrested in 2013 according to a study by Jack L. Hayes, International Inc (Gentec, 2014). His report found dishonest employees stole, on average, 5.4 times more than shoplifters. (Gentec, 2014). Security at the Point of Sale There are many ways a clerk can steal from the employer at the register. Activating gift cards for more money or issuing fraudulent gift card returns, price manipulation through unauthorized discounts, faking barcode scans of big-ticket items, scanning lower-price items…
What do Jeff Skilling, Bernie Ebbers, Dennis Kozlowski, John Rigas, Sanjay Kumar, Walter Forbes, Joe Nacchio, Richard Scrushy, Sam Waksal, and Martin Grass all have in common? They were all CEOs of prominent public companies, convicted of big-time corporate fraud and sentenced to lengthy prison terms.…
1-6 Cressey’s “fraud triangle” states that three factors—nonshareable financial need, perceived opportunity, and rationalization—are present in cases of occupational fraud. Which of these three factors, if any, is most important in causing executives, managers, and employees to commit occupational…
Even if Northeast Iowa Ethanol, LLC did not keep up with what Drizin was doing and maybe did not look into what and where he was investing their money, it still did not give Drizin the right to do whatever he felt like with funds that did not belong to him. Integrity is a big part of business and from what I have read Drizin lacks all of it.…
At an early age, Barry Minkow was introduced to the carpet cleaning industry by his mother who worked part time as a telephone solicitor for a small carpet cleaning company. This insight of the industry allowed Minkow to understand that the carpet cleaning industry was one which had very few barriers to entry, no licensing requirements, and required only a small amount of capital to enter. Also, because of these few barriers to entry, the industry has historically attracted a larger number of faulty startups in comparison to other industries. At 16 years old, Minkow started his carpet cleaning company under the name of ZZZZ Best Company. Right away he had a difficult time with customer complaints, stringent competition, and the inability to collect all checks, and vendors insistent on collecting payments. These all combined together prevented ZZZZ Best from becoming anything but marginally profitable, which was a red flag for banks who wouldn’t lend Minkow money. The fraud started when Minkow started to come up with his own innovative ways to finance his business, including: check kiting, credit card forgeries, and the staging of thefts to fleece his insurance company. Minkow was smooth and had charm which allowed all of these false financing options to be possible. Minkow’s success at beating the system encouraged him to further exploit fraudulent activities in different areas. Minkow befriended numerous friends whom aided his fraudulent activities, including an insurance claims adjuster. Minkow promised to pay this adjuster $100 per week if he would confirm to banks that ZZZZ Best was the recipient of occasional insurance restoration contracts. Minkow used these phony insurance restoration contracts to generate the paper profits and revenues that were needed to convince bankers to loan his business money. Minkow also created phony financial statements in order to complete these loans. Soon, insurance…
Crime depends on a person’s motive and opportunity. Fraud can only be only deterred by looking at several factors. According to Wells, greed is a factor in occupational fraud but it’s a human trait that is hard to measure because people have different levels greed. When a person justifies committing fraud against his employer this is wages of kind. With wages of kind justification is not what’s important it’s the perception. Occupational Fraud and abuse is immoral, illegal and has negative consequences and to prevent it education is essential within organizations. Understanding and being educated with the concept of wages of kind is crucial to minimizing fraud and abuse. To help minimize fraud organizations need to first “hire the right people, treat them well and don’t subject them to unreasonable expectations.” When an employee expects an employee to be truthful in everything they due this is unreasonable. According to a book titled, The day America told the Truth, “91% of people surveyed admitted to lying on a regular basis. Most of these lies have nothing to do with fraud and not all liars are fraudsters, but all fraudsters are liars. Lying cannot be eliminated but to deter fraud, lies need to be kept from turning into fraud.” (Wells…
However, actual occurrence of such cases is perhaps more frequent in small and family-owned businesses. Heightened awareness of governmental and nonprofit embezzlement stems from newspaper headlines that are littered with stories about town managers, executive directors of organizations, and town secretaries abusing their access to monetary resources. These embezzlers often whittle amounts ranging from $48,000 to $500,000 slowly from accounts via self-issued checks, failure to record cash transactions, padding travel expenses, and doctoring financial statements (Skelton, 2012). Such reports are much more infrequent and uncommon among local businesses, though they do exist. Brown proposes that the lack of reporting of embezzlement from small businesses is due to the lack of financial resources. That is companies fail to report “the ‘small’ losses—typically a few thousand dollars. These are the ones where the initial investigation will cost more in lost staff time and professional fees than the total theft” (Brown, 2012). In such cases, organizations opt to instead dismiss the employee and reevaluate their current internal control system. It is important for them to recognize, however, that just because instances of pilfering and substantial theft from small business employees are not more prevalent in the news, it does not mean that such acts are not…
Contracting fraud has been an ongoing problem for small businesses in the United States. Small businesses are legally obligated to receive a fair portion (23 percent) of the total value of all the government's prime contracts as mandated by the Small Business Act of 1953. Since 2002, a series of federal investigations have found fraud, abuse, loopholes and a lack of oversight in federal small business contracting, which has led to the diversion of billions of dollars in small business contracts to large corporations.…
The Globalization of White Collar Crimes: An Inside Look of How Fraud, Embezzlement, Cybercrime, Identity Theft and Forgery Are Increasing World-Wide…
Each alternative is appropriate for a given aspect of the system. As a result, they work together to fully document the nature and function of the information system.…