Fraud
Can corporate fraud ever be eliminated from the workplace?
Abstract
Corporate fraud has been a growing issue since Enron bankruptcy. The factors that contribute to the occurrence of corporate fraud are hard to control and methods used to prevent and detect fraud both by internal control and outside auditing have unavoidable weaknesses. Despite all the effort being made, it is highly unlikely that corporate fraud can be eliminated from the workplace.
Introduction
After Enron scandal got revealed in 2001, an increasing number of corporate frauds have been discovered and studied. Fraud has a broad meaning. Corporate fraud, specifically, can be defined as “activities undertaken by an individual or company that are done in a dishonest or illegal manner, and are designed to give an advantage to the perpetrating individual or company”, according to Investopedia. It goes beyond the scope of an employee 's stated position, and is marked by their complexity and economic impact on the business, other employees and outside parties. This paper will examine the causing factors of corporate fraud to reveal its unpredictability and the two major channels, internal control and external auditing, to fight fraud. Because corporate fraud has a complex set of causing factors that can only be managed but not removed and its prevention or detection methods by internal control and outside auditing have weaknesses within, it is highly unlikely that corporate fraudulent activities can hardly be eliminated from workplace.
Nature of Corporate Fraud and its occurrences
The classical fraud triangle theory categorizes three features embedded in fraudulent activities, namely incentive, opportunity and rationalization. If there is the incentive for fraudsters to commit fraud, the opportunity exists for them and the rationalization of the fraud makes the perpetrators not feel guilty about it, they will commit the fraud. The factors that contribute to the occurrences of fraud is
Abstract
Corporate fraud has been a growing issue since Enron bankruptcy. The factors that contribute to the occurrence of corporate fraud are hard to control and methods used to prevent and detect fraud both by internal control and outside auditing have unavoidable weaknesses. Despite all the effort being made, it is highly unlikely that corporate fraud can be eliminated from the workplace.
Introduction
After Enron scandal got revealed in 2001, an increasing number of corporate frauds have been discovered and studied. Fraud has a broad meaning. Corporate fraud, specifically, can be defined as “activities undertaken by an individual or company that are done in a dishonest or illegal manner, and are designed to give an advantage to the perpetrating individual or company”, according to Investopedia. It goes beyond the scope of an employee 's stated position, and is marked by their complexity and economic impact on the business, other employees and outside parties. This paper will examine the causing factors of corporate fraud to reveal its unpredictability and the two major channels, internal control and external auditing, to fight fraud. Because corporate fraud has a complex set of causing factors that can only be managed but not removed and its prevention or detection methods by internal control and outside auditing have weaknesses within, it is highly unlikely that corporate fraudulent activities can hardly be eliminated from workplace.
Nature of Corporate Fraud and its occurrences
The classical fraud triangle theory categorizes three features embedded in fraudulent activities, namely incentive, opportunity and rationalization. If there is the incentive for fraudsters to commit fraud, the opportunity exists for them and the rationalization of the fraud makes the perpetrators not feel guilty about it, they will commit the fraud. The factors that contribute to the occurrences of fraud is
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