independency is disregarded and profit‚ status and commission is given more weight. Executives are taking enormous amount of compensation while their company is facing difficulty in maintaining its operations. These all are examples of unethical and fraudulent conduct. There are numerous examples which can be taken into account where unethical behavior is at rise and compensation given to executives is way beyond their worth. The fraud which I will present is about Enron. Enron was the biggest energy
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be manually reported to head office‚ now using ERP system‚ sales info at retail counters updated every 4 hours to head office -inventory information entered manually - -reducing fraudulent behavior to 2% of retail sales -pocket in difference loss=3M -changing barcode loss=1.5M -current loss of fraudulent behavior is 5%‚ if we can reduce the above two misbehaviors‚ we will be able to reduce fraud to 2% -using technology and social corrections together? SOLUTION: -problem not only lies
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Factors related to fraudulent financial reporting and misappropriation of assets (ASA 240 incentives/pressures) Adverse relationship between the entity and employees with access to cash or other assets susceptible to the theft may motivate those employees to misappropriate those assets‚ for example: promotions‚ compensation‚ or other rewards inconsistent with expectations. Management and weaknesses in internal control may be present when misstatement due to either fraudulent financial reporting
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describe the wide range of investigative work which accountants in practice could be asked to perform. The work would normally involve an investigation into the financial affairs of an entity and is often associated with investigations into alleged fraudulent activity. Forensic accounting refers to the whole process of investigating a financial matter‚ including potentially acting as an expert witness if the fraud comes to trial. Although this article focuses on investigations into alleged frauds
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serious mistakes when planning and executing the audit procedure. Furthermore‚ Larry Gray did not do sufficient research on Barry Minkow and ZZZZ Best prior to accepting the engagement. If he would have‚ he may have realized that Barry Minkow was fraudulent and that the strength of the internal controls was weak. This would have made Gray more inclined to physically inspect the “confirmations” of the restorations contracts and other evidence that was provided to him. The above mentioned influenced
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&The&triangle&is&usually&pictured& with&three&common&fraud&elements:&opportunity‚&motivation‚&and&rationalization.& The&opportunity&to&commit&fraud&occurs&when&employees&have&access&to& organizational&assets&or&information&that&allows&them&to&commit&and&conceal& fraudulent&activity.&In&general‚&the&opportunities&to&commit&fraud&increase&when&an& organization&has&a&poorly&designed&system&of&internal&controls‚&or&there&are&persons& in&positions&of&authority&who&are&able&to&override&existing&controls.& ! Motivation&is&also&referred&to&as&incentive&or&pressure
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financial statements. There are two types of fraud considered: misstatements arising from fraudulent financial reporting (e.g. falsification of accounting records) and misstatements arising from misappropriation of assets (e.g. theft of assets or fraudulent expenditures). Examples of fraudulent financial reporting and Misappropriation of assets; * Fraudulent financial reporting. An example of fraudulent financial reporting is a company that ships customers’ goods that have not been ordered and
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eyes of law‚ a company is a legal person with a separate entity distinct from its members of shareholders. In essence it means that there is a veil or curtain separating the legal entity of the company from its members or shareholders.• When any fraudulent and dishonest use is made of the legal entity‚ the individuals concerned will not be allowed to take shelter behind the corporate personality. The Courts will break through the corporate shell and apply the principle of ‘lifting or piercing the
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SUMMARY Eddie Antar (Crazy Eddie) dominated the retail consumer electronics market in the New York City metropolitan area. By 1987‚Antar’s firm‚ Crazy Eddie ‚ Inc.‚ had 43 retail outlets‚ sales exceeding $350 million‚ and outstanding stock with a collective market value of $600 million. During his term as the company’s chief executive. Antar had personal gain of more than $70 million. The first step Crazy Eddie done in order to gain success was to expand his little store into many big consumer
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fraud or scandals are business scandals that come from the tampered reports‚ usually by long time employees or trusted executives in either a large corporation or small business. In order to hide serious financial problems‚ these companies will use fraudulent bookkeeping to overstate sales and income‚ inflate the worth of the company’s assets‚ or state a profit when the company is operating at a loss. These altered records are then used to receive investment in the company’s bond or to receive loans
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