The top element of the diagram represents the pressure or motive to commit the fraudulent act while the two elements at the bottom are perceived opportunity and rationalization (Wells, 2011 in Rasha & Andrew, 2012) as cited in (Abdullahi & Mansor, 2015).These elements have been defined by various researchers. For instance, Lister (2007, p.63) defines pressure as “the source of heat for the fire”. He added there are three types of motivation or pressure which are personal, employment stress, and external pressure. Vona (2008) stated personal and corporate forces as motivations’ proxies for fraud commitment. Pressure comes in many forms, both financial and non-financial. Financial pressure is recognized as the most common factor that can lead …show more content…
Forensic accounting can also be seen as an aspect of accounting that is suitable for legal review and offering the highest level of assurance (Apostolou, Hassell, & Webber, 2000)as cited in (Eliezer & Emmanuel, 2015). Therefore, forensic accounting can be described as a specialized field of accountancy which applies accounting principles, theories and judgments to facts that have legal bearing, especially fraud investigation and financial disputes. It encompasses all accounting and financial analyses performed for assisting counsels in connection with investigation, assessment and proof of issues in a dispute-resolution proceeding. It is the skilful gathering of financial information, reconstruction of financial evidence and solving problems within the context of the rules of evidence and the legal system. Forensic accounting uses accounting, auditing, and investigative skills to conduct investigations into theft and fraud (Ozkul & Pamuku, 2012). The work involves an investigation into the financial affairs of an entity and is often associated with investigations into alleged fraudulent activity. It is a useful technique to detect fraud in public service
The analytical procedures is yet another way to detect the fraud. Through analytical procedures the relationship between different figures is develop that support the increase or decrease effect on the balance sheet and the income statement. The following procedures to be performed:
This paper is designed to examine a few ways in which people commit fraud. Specifically, it will look at a recent complaint filed by the Securities and Exchange Commission (“SEC”) with the United States District Court for the Central District of California (“CDCA”). The complaint alleges that five executive of iPayment (the “Company”), a New York City headquartered credit and debit card processor, defrauded iPayment of approximately $11.6 million. Their alleged actions defrauded the company of millions of dollars and, in turn, caused the Company to file multiple false reports with the SEC. The three ways the alleged fraud took place was through:
In a simple word fraud means deceitful practice. Fraud means someone who manage your whole business with each and every right he is doing misrepresentation to you with some intense. Sometime misrepresentation is false is but induce the other person “to act”- resulting in injury or damage to him or her.
The term “fraud” is commonly used to describe the use of deception to deprive, disadvantage or cause loss to another person or party. This can include theft, the misuse of funds or other resources, or more complicated crimes such as false accounting and the supply of false information. This case study of Mountain State Sporting Goods is an excellent example of individuals acting on the opportunity to financial benefit by committing what they thought was harmless adjustments, but in reality was fraud. In this case study there are is just so much wrong with this company and how it operates. We noticed multiple areas of concern before even seeing the financial statements and my concerns were confirmed upon further investigation.
to seek justice, a Forensic Accountant can be utilized to help with recovering the damages caused
With this information, police arrested John Taylor on October 16th, 2001. John Taylor initially denied the prosecution of murder. He said she was at his house in his bed, but he did not murder her. Teirnan fell off his bed, banged her head. Believing she died, he panicked, lifted her up by her scarf and buried her in the woods. The prosecutors then used the pathological evidence that the amount of decomposition did not match up with the time of burial. John Taylor became a convicted killer charged with murder, rape and abduction in July 8th, 2002. It was clear on November 26th, 2000; Taylor abducted Leanne Tiernan in Houghley Gill, took her back to his house, sexually assaulted her and then strangled the teenage girl with her scarf. He was sentenced to serve two life sentences with no chance of parole. In February 2003, forensic scientists were able to link Taylor’s DNA with two cases of unsolved rape in the 1980s. The first victim a prostitute and the second victim a mother left alone with her eighteen month old daughter. Once again, the court charged Taylor with two more life sentences for rape. Forensic scientists took advantage of technology, more specifically DNA databases to reveal the truth of past,
According to Wolfe and Hermanson, a fraud cannot happen if one of these elements is missing. The first element; incentive is the first step to committing a fraud. This is the reason why someone will think about committing fraud, some of the examples they showed were employment stress, greed, personal debts and financial problems. In the case of Wells Fargo, employees were asked to increase the number of accounts each client had in order to increase sales and if they did not meet those numbers, they were going to be punished; therefore, the incentive of the employees to commit fraud was not getting more money, or personal reasons but instead they wanted to enhance the sales and prevent getting
According to the article authored by Mark Rupert, what are the seven best practices in the roles and responsibilities of an internal audit function?
Like most things there is a fraud triangle, which shows what has to be present for fraud to occur. The fraud triangle consists of motive or pressure, opportunity, and desire or rationalization. There are many times of fraud but the one Mr. Carr talked about was occupational fraud. Occupational fraud is when individuals defraud their employers. This type of fraud is usually found in small organizations because of weak or anti-fraud controls.
Cressey's fraud triangle includes three elements that must be present in order for an individual to commit fraud: perceived pressure, perceived opportunity, and rationalization. A perceived pressure is a non-shareable financial or non-financial problem that motivates an individual to commit fraud. Financial pressures often include greed, meeting shareholder expectations, and maintaining a desired lifestyle. A perceived opportunity includes an individual's knowledge and position to commit and conceal fraud. Perceived opportunities occur when a company has a lack of effective internal controls. Rationalization includes an individual's justifications as to why his or her actions were not criminal. Examples include “I did nothing wrong” or “I deserve this money than the company does” (The Fraud Triangle 2017).
The fraud triangle was developed by Dr. Donald Cressey; it was designed to explain the reasons behind the crimes. According to Dr. Cressey three factors are present when a person commits fraud: pressure, opportunity, and rationalization. When a person commits a crime there’s usually a reason behind it, and this reason can motivate him to commit such crime, for example: divorce, debt, or addictions. This is known as the pressure factor.
... associated to civil disputes. Forensic accountants are also identified as fraud investigators, investigative accountants, forensic auditors or fraud auditors.Forensic accountants are also increasingly playing more proactive risk reduction roles by devising and performing extended procedures as part of the statutory audit, acting as consultants to audit committees fraud deterrence engagements, and aiding in investment analyst research.
At a glance, accounting might appear as a repetitive cycle of preparing and examining financial statements. However, a brief exposure to accounting has taught me how chaotic it can be for accountants. An accountant captures and represents the information of businesses. By reviewing financial operations, an accountant helps a business run efficiently. This profession can be intellectually stimulating and rewarding. After learning about accounting, I cannot help but be interested and desire to work toward a degree in accountancy. In my studies, I have learned accountants require a plethora of qualities to be successful. And to mature from a student to a professional, I must resolve to strengthen my weaknesses. There is much I must learn and achieve, but a degree in accounting is well worth the time spent.
Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties.
Two key disciplines in accounting are financial accounting and auditing. Financial accounting involves processes by which financial information about a business is recorded, classified, summarized, interpreted, and communicated (Wikipedia, 2005). Auditing is a related to financial accounting, but it is a separate discipline. "Auditing is the process...