Misappropriation of Assets

1400 Words Nov 12th, 2005 6 Pages
Introduction Over the past two years, corporate America has endured a plethora of fraudulent acts committed by those of high status within their respective corporations, most of which involve internal fraud. Internal fraud has two main aspects, misappropriation of assets and fraudulent financial reporting, with the focus of this discussion lying within the former. Misappropriation of assets is defined as fraud for personal gain. It is the most common type of fraud found among employees and frequently includes theft of cash and inventory. Misappropriation of asserts, better yet, fraud in general, is relevant to and pivotal for accountants, auditors, and people in business for the simple fact that the losses from fraud affects the …show more content…
Swartz borrowed approximately $33,097,925." (Sri Media 2002) This falls under the category of misappropriation of assets because these funds were taken form the company and it violates the "separate economic entity principle" for accounting purposes. Monies were borrowed form the company for personal use and gain which is misappropriation of the firm 's assets. Swartz borrowed millions in non-program loans to "purchase, develop and speculate in real estate; to fund investments in various business ventures and ownership of Tyco stock." (Sri Media 2002)

Kozlowski also
"caused a Tyco subsidiary to purchase property in Rye, New Hampshire from [him] on July 6, 2000 for $4,500,000. After an appraisal in March 2002 valued the property at $1,500,000, Tyco wrote down the carrying value of the property to the appraised value and charged [him] $3,049,576 overpayment to expense. [He] also used millions of dollars of company funds to pay for his other personal interests and activities, including a $700,000 investment in the film "Endurance"; more than $1 million
Open Document