Corporate Fraud Is A Big Part Of The Fraud

Corporate Fraud -consists of 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 (Kim, 2015)

As said in every economics class, the reason every business goes into business is to make money. The same can be said in criminal cases involving businesses. In the majority of cases, executives and people highly ranked in the company tend to bend the numbers in the financial/accounting areas of the business or corporation. They do not do this for fun, but rather to make money. Something needs to be done before corporations really get out of hand.

(TCO 5) Fraud is an intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. In our readings and discussions we have seen several examples of fraud in business. Using that experience (1) provide an example of a common fraudulent practice in business with an explanation of how the practice works and (2) name and describe each of the elements of the Fraud Triangle.

Internal fraud consists in “a type of fraud that is committed by an individual against an organization. [Furthermore], a perpetrator of fraud engages in activities that are designed to defraud, misappropriate property, or circumvent the regulations, law, or policies of a company”[8]. Not only has the incidence of internal fraud increased in frequency because of the availability of sensitive information such as client details or confidential business documents; moreover, this type of fraud is found in various types of organizations, ranging from corporations, public service institutions and financial institutions. Our analysis will concentrate on the most common and prolific types of internal fraud, namely identity theft, insider trading, loan fraud and wire fraud. Interestingly, PriceWaterhouseCooper conducted a survey that revealed that the “demographics of a typical fraudster are as follows: males (85% of cases), 31-50 years (72% of cases), reached high-school level (50%), Bachelor’s or post graduate degree (50%) and middle or senior management (52%)”[9].

Employee embezzlement is the most common type of occupational fraud, and can be either direct or indirect. Direct fraud occurs when the employee steals company assets such as cash, or inventory. Indirect fraud occurs in instances where employees take bribes or kickbacks from vendors, customers, or others to provide allowances such as lower sales prices,

Another source of a great amount of fraud is the fact that a lot of businesses are careless when they're hiring new employees because they do not do conduct adequate background checks during the hiring process. They also have lack an adequate network and do not have a reliable computer security system in place so that also plays a big factor in to why their business is victim to fraud and cybercrime.

Three conditions are necessary for financial statement fraud to occur. There must be (1) an incentive to commit fraud. (2) the opportunity to commit fraud, and (3) the ability to rationalize the misdeed. These conditions make up what antifraud experts call the fraud tringle (Libby, Libby, & Short, 2017, p 232). Some well-known names come to mind when I think of financial fraud (e.g. Bernie Madoff and his $50 billion Ponzi Scheme, WorldCom. Arthur Anderson). Also, the Sarbanes-Oxley Act of 2002 (SOx) comes to mind. SOx was a law that was implemented to oversee

Dixon, Illinois is a small town of about 16,000 people (US Census, 2015) located approximately 100 miles southwest of Chicago. Until 2012, Dixon’s claim to fame was being the town where, 40th President of the United States of America, Ronald Reagan grew up (City of Dixon). Today, in addition to hosting a future president for 22 years (City of Dixon), Dixon, IL is known as the location of the largest and longest municipal fraud in United States history (Mathieson, 2014). This paper will examine the main players in the fraud; how the fraud was carried out; the laws and procedures violated; the impact of the fraud; and the measures that could have been taken to prevent it.

The most common type of fraud within businesses is accounting and financial reporting fraud. The U.S. Securities and Exchange Commission (SEC) has made enormous efforts to establish laws and regulations by which accounting professionals and companies have to abide by to prevent fraudulent reporting and any sort of unethical activity. Many are very well aware of the Enron scandal which shook eth American business industry very much. A lot of investors were hurt and millions of dollars were lost. Enron’s CEO Jeffrey Skilling ended up being sentenced, even though his sentence was later reduced to 14 years of prison, (Berman, The Huffington Post). Because of the Enron scandal and few other similar ones, former President George W. Bush signed the Sarbanes-Oxley Act of 2002 into law. This act impacts all CPAs as well as CPA firms that conduct public company auditing. Attorneys, investment bankers, dealers, financial analysts and brokers are affected as well. The Sarbanes-Oxley Act of 2002 now requires the New Public Company Accounting Oversight Board (PCAOB) to retain a seven year record, cooperate with CPA groups, complete annual inspection, investigations may be completed at any time, registration with the board is mandatory, certain sanctions for violations may be put into place, etc. Without a doubt, there are a

Healthcare fraud is costly for everybody, as it harms the reputation of the institution or physician committing it, and financially damages the patient being affected.By definition fraud may be defined as intentionally employing surprise, trickery, cunning, deception and unfair ways by which one party cheats another party out of financial resources. In order to educate a healthcare manager regarding fraud , many aspects of fraud must be assessed. This includes the types of fraud, the consequences that come with fraud,the individual(s) committing them, techniques to prevent fraud, and why the healthcare industry is vulnerable to fraud.

According to Investopedia online (2015), Sarbanes-Oxley Act of 2002 (SOX Act) is defined as a “legislative response to a number of corporate scandals that sent shockwaves through the world financial markets.” Prior to SOX, the United States faced major financial scandals in the American history. Some of the biggest financial scandals involved such high-profile companies as Enron, Tyco, WorldCom, and Arthur Andersen. Two types of fraud exist in the corporate world. First is fraudulent financial reporting which is defined as an intentional misstatement of amounts or disclosures with the intent to deceive users. The other fraud is misappropriation of assets which is defined as a fraud that involves theft of an entity’s assets. The following will

According to Daniel F. Dooley (2008), a member of the Commercial Fraud Taskforce, financial fraud with private middle-market companies is on the rise. In fact, Mr. Dooley believes that he has seen more instances of fraud in the past two years than in the previous ten. He notes seven areas in which financial fraud has increased over the past few years:

In today’s society crime occurs everyday across all aspects of life. One particular crime is that of white collar and corporate level crime. It is important that we as a society study this type of crime in depth because many individuals believe that white collar and corporate level crimes are victimless crimes when in reality they have the potential to destroy major corporations and economies all with one single case. The news or media rarely talk about this type of crime because it is often difficult to understand and individuals typically lack interest in these types of cases. One particular case is that of Jordan Belfort. Dubbed the infamous “Wolf of Wall Street” Jordan Belfort is a former stockbroker who robbed investors of over $200 million dollars to create his wealth through “pump and dump” schemes, insider trading, money laundering securities fraud, and stock-market manipulation. As an attempt to further understand these complex cases I will break down Belfort’s case as far as the methods and means as to how he got started, his use of “pump and dump” schemes and other means as to how he acquired his wealth. In addition to this I will discuss the sanctions and disciplinary action that Jordan Belfort was given, how the case affected society and what new regulations were

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. And 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. Traditional fraud triangle theory by Donald Cressey explains that propensity of fraud occurring in an organization lies on three critical elements which are Pressure, Opportunity, and Rationalization.

Financial statement fraud is usually a means to an end rather than an end in itself. When people "cook the books" they may doing it to "buy more time" to quietly fix business problems that prevent their entities from achieving its expected earnings or complying with loan covenants (Fraud Magazine, 2014. It may also be done to obtain or renew financing that would not be granted or would be smaller if honest financial statements were provided. People intent on profiting from crime may commit financial statement fraud to obtain loans they can then siphon off for personal gain or to inflate the price of the company 's shares, allowing them to sell their holdings or exercise stock options at a profit (Fraud Magazine, 2014). However, in many past cases of financial statement fraud, the perpetrators have gained little or nothing personally in financial terms. Instead the focus appears to have been preserving their status as leaders of the entity - a status that might have been lost