Social Media Fraud Research Paper

(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.

Internal fraud consists in “a type of fraud that is committed by an individual against an organization. [Furthermore], a perpetrator of fraud engages in activities that are designed to defraud, misappropriate property, or circumvent the regulations, law, or policies of a company”[8]. Not only has the incidence of internal fraud increased in frequency because of the availability of sensitive information such as client details or confidential business documents; moreover, this type of fraud is found in various types of organizations, ranging from corporations, public service institutions and financial institutions. Our analysis will concentrate on the most common and prolific types of internal fraud, namely identity theft, insider trading, loan fraud and wire fraud. Interestingly, PriceWaterhouseCooper conducted a survey that revealed that the “demographics of a typical fraudster are as follows: males (85% of cases), 31-50 years (72% of cases), reached high-school level (50%), Bachelor’s or post graduate degree (50%) and middle or senior management (52%)”[9].

Statistics show that most security breaches are direct results of insider misconduct rather than being hacked. According to the most recent Verizon Data Breach Investigations Report, about “285 million records were compromised in 2008.” Seventy-four percent of the incidents were from inside sources. Users are more likely to be victims of computer virus infections, inquisitive students/co-workers, and hardware failures than to be victims of an Internet security attack.

Like technology, our species has adapted to fit modern times. Through these adaptations, we have begun to communicate through our newly developed technology by means of social media. In today’s society, we are surrounded by sites such as Facebook, Twitter, E-Mail, and various other websites that can often times consume our lives. While social media has plenty of advantages, it also has disadvantages that often times get ignored. As Internet users, it is important to examine these disadvantages and make sure we understand the negative sides to social media.

Social media can be seen from completely different aspects and points of views. A major role in these different opinions plays mostly the age of the beholder, because social media made an enormous change in the last 50 years. One very important aspect in our today’s society is to get as many information as possible in a very short time period ("Impacts of social media”) Through social media and especially social networks such as twitter and Facebook, the information gets spread extremely fast. There are for example reporters who search on those networks to get information for their news and articles. (“Impacts

According to Daniel F. Dooley (2008), a member of the Commercial Fraud Taskforce, financial fraud with private middle-market companies is on the rise. In fact, Mr. Dooley believes that he has seen more instances of fraud in the past two years than in the previous ten. He notes seven areas in which financial fraud has increased over the past few years:

Some industry-specific factors, such as having valuable near-cash assets, can increase the organization's vulnerability. Also they will need to rationalize the actions as justifiable. The individuals committing the fraud must first convince themselves that their behavior is acceptable or will be temporary. For example, Barry Minkow’s believed that the lies and deceit are for the betterment of his company and that with time everything will eventually return to normal.

We cannot deny how big of an impact social media has on our lives now, not only on people but businesses too. It has opened a whole new door to the business world and given them a big opportunity to interact and attract a larger amount of customers. It’s given us a new and faster way of communication by exchanging pictures, stories, news, blogs, online discussions, etc. In exchange businesses have benefited by a long shot just by the click of a button. With the help of the Internet a company no longer is dependent on a particular customer base to survive because now it can reach out to a worldwide audience within seconds. It’s imaginable the countless business attributes of all social media to this day and still is growing. Social media

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.

Throughout history there have been many successful companies as well as companies that have been a debacle. The success of the company has to do with the management and how it executes its strategy. If the management is ineffective, the company will most likely fail; however, if the company has good management it is more likely to prosper. There are many responsibilities that a manager must complete, chief among them are the four functions of management are planning, organizing, leading, and controlling (PowerPoint). In order for the company to be successful the management must fulfill all four functions. In some case not all four functions are met to expectation, with the results that the company to be not as successful as it could be if they

The term of “fraud triangle” was developed by Dr. Donald Cressey, a criminologist who studied embezzlers. The three basic elements of fraud triangle include perceived pressure, perceived opportunity, and the ability to rationalize. It explains the nature of many fraud offenders and also become a tool to assess the risk of fraud. It is important to companies to incorporate the fraud triangle theory in order to reduce the risk of fraud within their organization. From my standpoint, companies should incorporate the fraud triangle from the following aspects.

In today’s business world, social media is being discussed on a daily basis. This phenomenon has taken over the marketing and advertising industries and has changed the way they handle their efforts to attract customers. There is a big misunderstanding that social media are only popular networking sites such as Facebook and Twitter, but as defined by the Merriam-Webster dictionary, social media are “forms of electronic communication (as Web sites for social networking and micro blogging) through which users create online communities to share information, ideas, personal messages, and other content (as videos).” The rise of these online communities has given companies an opportunity to engage in conversations with their customers. This in

Multiple studies have been conducted on the topics dealing with financial fraud. The same can be said about business ethics and

Fraud is defined as dishonest activity causing actual or potential financial loss to any person or entity, including theft of money of other property, by employees or persons external to the entity, and where deception is used at the time, immediately before or immediately following the activity1. Fraud is an emerging problem both nationally and globally and is an increasing problem all around the world2.

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.