Elements Of Fraud Prevention, Authority Limits, And Transaction Level Procedures

The point of this article is to inform business owners of the dangers of embezzlement, and heists performed by employees inside the business. Some businesses find corruption within itself. The article provides statistics that state embezzlement is common within a business, and the owner must be careful when trusting other employees. The article is proficient, focusing on the importance of fraud prevention programs.

Performance management is the integrated process of defining, assessing, and reinforcing employee work behaviors and outcomes (Cummings and Worley 2005). Performance management focuses on understanding, optimizing, and aligning

The report further showed that seventy-seven percent of all frauds in the study were committed by individuals working in one of six departments: accounting, operations, sales, executive/upper management, customer service and purchasing. Most perpetrators of occupational fraud are first-time offenders with clean employment histories. Approximately 87% of the perpetrators had never been charged or convicted of a fraud-related offense, and 84% had never been punished or terminated by an employer for fraud-related conduct. In eighty-one percent of cases, the perpetrators displayed at least one behavioral red flag among behaviors that are often associated with fraudulent conduct—living beyond their means, financial difficulties, unusually close association with vendors or customers, and excessive control issues were the most common behavioral warning signs addressed in the

Performance Managementfor human resource departments it is important; to utilize the skills, focus and provide incentives for employees that are based on performance to achieve the organization’s goal. Human resource departments need to provide training and programs that are accessible to help enhance members of the organization’s learning with constant changes in policies and procedures.

Different levels of management have responsibilities for the compliance of the any fraud deterrence, detection and prevention program that is implemented within the organization. There has to be a clear definition of the roles of each level of management along with their responsibilities in order to ensure that there is an effective fraud prevention program in place (Harrington & Schumacher, 2006). This applies to the oversight responsibilities as well. This formal program needs to be put in place so that employees understand their responsibility in carrying out their ethical and legal obligations within the company.

Performance management system makes a clear link between the performance and compensation, and allows the employees to understand the areas which need to be improved and directs them to appropriate training opportunities to enable improvement in performance to take place. Joseph Martocchio says, “Work with line managers to design the performance appraisal plan which best fits the specific duties and responsibilities of particular roles” (Martocchio, 2011). Compensation and reward decisions are likely to be arbitrary in the absence of a good performance management system. In short, performance management is a key component of talent management in organizations. It allows assessing the current talent and making predictions

The company can undertake to train its employees on the disastrous effects of fraud and its impact to the organization. The organization can also help the employees develop a positive attitude towards their jobs and also understand their role in curtailing fraud and corruption tin the organization.

Corporate fraud was the cornerstone for the strict implementation of the Sarbanes-Oxley Act of 2002 (SOX). SOX implements many compliance regulations, but one of its regulations, specifically Section 404, relates to an organization’s internal control procedures with the purpose of protecting organizational assets and investors’ interest. Consequently, organizations, big or small, private or public, are prone to fraud. SOX’s compliance of internal control procedures is developed through the Committee of Sponsoring Organizations of the Treadway Commission (COSO) known as the COSO framework that consists of the following procedures: control environment, risk assessment, control activities, information and communication and monitoring. Each variable address a layer that builds upon each other by

Performance management relates to an organization’s ability to implement a system to evaluate and advance employee performance. Achieving peak performance requires consistency, clear objectives, and constructive employee evaluation. According to Mithas, Ramasubbu, & Sambamurthy (2011), an organization must design the performance management system based on extensive research about the organization’s mission, and then properly communicate the purpose of the system to employees, stakeholders, and decision makers. After the performing the research, the information should be used to establish the appropriate performance management specialized for the organization. In addition, an effective performance management system should align

A study conducted by the Association of Certified Fraud Examiners (ACFE) surveyed 959 cases of reported occupational fraud between 2006 and 2008. The report broke fraud into three categories: fraudulent statements, asset misappropriation, and corruption. Ninety-nine of the 959 cases reported financial statement fraud with a median loss of two million dollars, making it the most costly of the fraud categories. In general, the study found that publicly traded companies that had implemented SOX controls reported fewer losses (70 to 96 percent) than those who had not implemented SOX controls. These results imply that implementation of SOX controls are directly related to a reduction in theft and other fraudulent behaviors. Surprisingly, it was noticed that in companies where management must certify the financial statements, fraud took approximately three months longer to detect than in those companies where management was not required to certify the financial statements. However, due to the complexity and relative newness of SOX and the complexity of the businesses and the ingenuity of people, it is not surprising that SOX has not been a booming success. Hopefully, over time, all the wrinkles will be ironed out allowing for deterrence or immediate detection to be attainable. (Rappeport,

The best way to protect executives against fraudulent acts is to establish an active system of monitoring. This will occur, using three services to monitor against possible misuse of their personal information. These protection services will watch for unauthorized activities at the major credit bureaus. In the event that there is some kind of issue, the individual would receive a phone call about these changes. This is when they can verify or deny that they authorized this kind of activity. (Biegelman, 2009, pp. 295 312)

Fraudulent, erroneous, and illegal acts committed by a public company, usually at a managerial or executive level, have been a very serious problem for many years and have prompted development of strict and updated regulations, such as the Sarbanes-Oxley Act, in an attempt to prevent these occurrences. Unfortunately, these new or updated regulations are not enough to prevent these acts from happening, thus not alleviating the auditors of their responsibility to detect fraud. Some methods that management and auditors can employ to prevent and detect fraud, errors, and illegal acts are: improving knowledge, improving skills,

Performance management is considerably high at a 4.5 rating for HR managers and only a slight difference exists for store managers with a rating of 4.0. This data implies that managers consider performance as a priority. The existing annual employee evaluations are effective but continual training and learning would also encourage optimum performance in all areas especially the sales staff.

Performance management is one of the most important activities of HR. It is not enough to simply go through the business as usual and much disliked annual exercise of assessing performance and driving rewards based on a performance assessment. The information system will be drive and modifies goals as needed, assesses performance against goals, and provides instant feedback which will give them an indication of their strength and weaknesses thus focusing on skill development and motivate employees to stay with the organisation. However this may lead to Substitution of individual judgments and Challenge the nature of an organisation and the role of management

A business can not work out without an account system, which includes internal. Internal controls are used by companies to make sure financial information is accurate and valid. Strong internal controls are signs of a financially healthy company and protect the company’s integrity. Strong internal controls can also increase a company’s profitability. There are several types of internal controls that companies used to protect themselves such as: Segregation of duties, asset purchases, supervisor review, internal audits and adequate documents and records. This paper will discuss several topics from a case study about And the Fraud