Fraud is one of emerging trends that is currently common in most of the daily transactions in most of the global institutions. This act of breaching confidence in order to expand the profit base of a firm or acquire a given service/good using a dishonest way has now become a routine practice among company personnel. This act is unethical as it leads to destruction or suffering of the party involved as he/she undergoes a loss in his assets either in terms of money or other forms. The most common cases occur in financial transactions that occur in our daily dealings. Frauds are frequent in the white collar jobs that involve the professionals in various fields who have the knowledge of manipulating records to suit their requirements. The professionals use their credibility in convincing a consumer to partake on a given purchase or service being offered (Everett, 1998).
The process comprises of many means that are put in place to fully satisfy the existence of a fraud. Corporate impropriety and management refers to the actions of using the available records to deliberately manipulate the desires of the top management level in a given firm. It is ranked among the most common applications that has got the eye of the press and the public at large as it has resulted to an investigation on all the corporate accounting systems in companies. Ideally, all the marketing capitals rely much on the financial statements provided by the management after being audited. Provision of false information relating to the firm’s activities due to improper means of accounting affects the final analysis provided by the capital markets that give overall view of the economy based on the functioning of the entire firm in a given environment. The government has put in place policies and regulations that help in detection and prevention of all the fraudulent activities in most of the organizations. It has called upon the employment of qualified personnel’s who carries out the auditing process professionally and do not manipulate the records or collaborate with management in issuing false information.
The establishment of the corporate accountability department that scrutinizes all the activities of an organization is one of the strategies that has reassures the consumers their safety in their daily transactions. Through the department, the evils and probable outcome about the fraud is highlighted and fully given consideration by the whole management as it prioritizes the role played by each personnel in the process including the major roles of the accountants and the auditors. In controlling the process, the BOD, the computer records, the authoritative policies and regulations and the personnel’s intelligence in relation to his profession are among vital factor put in place to insure corporate accountability is attained (Goldmann, 2010).
However, It has come to our knowledge that fraud is not only common in the management process but is also occurs through other forms that may include; the improper abuse of power where those in authority authorizes things to be done in their favor, through computer crime as with the modern technology one is able to access and carry out his/her intention on the website of a company without being noticed, the standards of auditing may vary as one personnel may not be fully able to audit all the records of a firm due to inexperience or other factors while carrying out the process and the act of betraying the professional through the use of unscrupulous conduct in both the auditing and accounting procedures. The market has put in place means like auditing standards that each personnel needs to meet before engaging in the auditing process, the financial disclosure policies that each must adhere to, the corporate criminal liabilities that clearly stipulates the outcome of breaking the laws and other regulations that aid in controlling the existence of fraud in the firms (Elliot &Willingham, 1980).
In many occasions, the executives have used many ways like using wrong figures in the final financial statements and other records in the firm in order to highlight high liquidity ratios and more profits within a short run in order to lure the investors and maintain their creditors. The recent case of the Enron firm in the United States is a good example that the management manipulated the final statement to indicate more profits yet the firm had high depts. Parmalat dairy firm in Italy is another company that underwent fraud as the top management used both its accountants and auditors in deceiving the whole globe that it was making profits yet it had large sums of debts that it owed. The process has of recent become common resulting to rise of an alarm on the credentials of the auditors. Their professionalism has been questioned by the publics as they are performing sub-standardized duties in their field of career. The investors and creditors seem to have lost faith in their services and are now calling upon the rival of the entire auditing system to give room for new generation that will stick to their professions by abiding to all laws and requirements in the auditing process (Jakubowski, Broce, Stone & Conner, 2002).
It has been effective over the period as fraud management lifecycle has been given priority as it is a general concern of each individual in the society. The scope, the size and span of getting involved in the above factor in our businesses and industries requires much focus as all are called upon to set a balanced lifecycle stage that will give room for proper channels in all the internal and external activities in a given firm. All the generation needs to become viable with the current stages, all the environmental risks, the constraints involved and the newly established philosophies on fraud management.
Elliot, R. K. , &Willingham, J. (1980). Management Fraud - Detection and Deterrence
United States: Peat, Marwick, Mitchell and Co
Goldmann, P. (2010). Financial Services Anti-Fraud Risk and Control Workbook. New Jersey: John Wiley and Sons .
Jakubowski, Broce, Stone & Conner. (2002). SAS 82’s effects on fraud discovery. Illuminating Fraud Detection Responsibility) (Statement on Auditing Standards (): The CPA Journal, Feb 2002 v 72 i2 P42 (5). New York State Society of Certified Public Accountants. Article # A834865
Everett, w. (1998). Card Security and Fraud Prevention Source Book. New York: Faulkner and Gray.