A Audience About Issues With Fraud And Scandals

Saiz, Thomas J. "FRAUD IS A MAJOR SECURITY ISSUE FOR BUSINESSES." San Diego Business Journal, vol. 20, no. 15, 12 Apr. 1999, p. 19. Learning Resource Center, t7lrcproxy.iccms.edu:2129/sbrc/detail/detail?vid=0&sid=9b7a4376-1cc6-48ea-8008-4ece1e694af8%40sessionmgr4008&bdata=JnNpdGU9c2JyYy1saXZl##AN=1805123&db=b9h.

1. The three aspects of fraud - Perceived pressure, Rationalization, and Opportunity were present in the CIT case as follows:

(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.

The second part is opportunity. The opportunity to commit fraud usually arises through weak internal controls.

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.

In the later part of 1990s, there was an epidemic of accounting scandals which arose with the disclosure of financials transgressions by trusted corporate executives. The misdeeds involved misusing or misdirecting funds, understating expenses, overstating the value of corporate assets or underreporting the existence of liabilities, and overstating of revenues.

Unfortunately, a quick scan of the business news will normally result in reports of unethical business behavior. To prove this point, let’s start with a review of the news for stories about fraud and other unethical behavior in business. You can use the University Library to start your search. Once you have located an article share it with the class by developing a summary of the important information. Make sure that you give credit to your source.

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.

What can you do to avoid fraud related to your chosen activity? Step 1: You have to understand what fraud is and how it is likely to emerge. Step 2: You have to Identify potential sources of fraud in your organizations. Step 3: Take steps to prevent fraud through processes or controls.

“The first leg of the fraud triangle represents pressure. This is what motivates the crime in the first place. The individual

In life, there are many times someone sees an opportunity that can better a situation in their life. Whether morally right or wrong some still take the action to better their life even if it can potentially be considered fraud. People tend to find ways to look past their morals. These situations can be something so small as not splitting the tips at your job evenly, fixing an old gambling debt, even cheating on your taxes. Some even take it as far as creating a fake business to receive money from people or steal money coming into an already existent company. These opportunities are everywhere we look. There are not many people in the world who would give up an opportunity to better a situation in their life. The question is just how far are they willing to go and for what are they receiving in the end. Most of these situations, if not all can be analyzed through the fraud triangle.

The fraud risk triangle is made up of three different components: Motivation (pressure), Opportunity and Rationalization. Motivation, or pressure, is the idea that mangement or other employees may be motivated to commit fradulent acts such as providing false financial statements. Opportunity is the idea that certain circumstances exist, such as the nature of the industry in which the company operates, where a corporation can manipulate its financials as a way of boosting overall

The last and third factor in the fraud triangle is the rationalization. Cressey describes rationalization as a necessary component of the crime before it takes place. In other words, he said that it is a part of the motivation for the crime. In that category, the embezzler does not see himself or herself as a criminal; they justify their misdeeds before they commit the crime. The rationalization plays the main role while fraudster commits an illegal act in their job place because they try to maintain their concept of themselves as a trusted person.

Among the nine factors of the perfect fraud storm; the economy, incentives, and expectations all fulfilled the three elements of the fraud triangle providing the necessary motivation for management to succumb to

Studies suggest that there are four basic factors that lead to fraud. First, is the opportunity to commit fraud, second, the incentive to commit fraud, third, the rationalization of the fraudulent act and fourth, the capability to commit the fraud.