The introduction of strict legislative texts, like the Sarbanes-Oxley Act in USA, has been proved to be an initial measure for the limitation of fraud in modern organizations (Heier et al., 2005, p.39). In the internal organizational environment, the ability of a firm to prevent fraud is depended on the level of cooperation/ coordination among employees at different levels of the organizational hierarchy. Under these terms, the human resources systems used within a specific organization are considered to be crucial for the success of the organizational initiatives against fraud. It should be noted that the effects of internal fraud on business performance can be differentiated in accordance with the nature of business operations, the business structure and the aims/ objectives of each organization; different assumptions are made in the literature regarding the effects of internal fraud on organizational performance; different plans of action can be suggested for mitigating fraud in firms that operate in various industrial sectors. Greenlee et al. (2007) focuses on the relationship between the internal fraud and the type of organizational structure – emphasis is given on non-profit organizations where ‘the losses due to fraudulent activities can directly reduce resources available to address tax-exempt purposes’ (Greenlee et a, 2007, 676). On the other hand, Levi (2008) notes that the expansion of global crime has been rapid due to the increased ability of ‘would-be perpetrators to recognize and act on specific opportunities’ (Levi, 2008, p.389). From another point of view, the external organizational environment is likely to affect a firm’s ability to control crime – the specific view is supported by Tilley et al. (2008) who emphasize on the difficulty to control crime in organizations that operate in ‘high crime neighbourhoods’ (Tilley et al., 2008, 443). In the case of Barclays – organization under examination – internal fraud is related
They have asked you to produce a report highlighting the risks posed by internal fraud, as well as the indicators/red flags and…
From the author, we learn that these two had very conflicting character traits in that Kearns had learned about business from a very tender age, and as he grew, he acquired business skills that made him prosper. However, he always lived beyond his means which forced him to work even harder to get the money.
Currently the company is in a process of expanding the products it offers by making different types of shoes that meet different markets demands. For example the company is in the process of manufacturing PHONESHOES that are specifically designed for helping business executives to carry out their operation more efficiently and effectively (Timothy, Loretta, & Kenneth, 2011).
The reports revealed the facts that the company scheduled smuggled money as sales from foreign banks. The reports misrepresented the true value of accounts payable to creditors. The inventory was overstated and the audit reports were doctored. The company’s accounting policy recognized sales returns by crediting the respective amount and at the same time it also counted it as inventory.
The negative impact is also transferred to the national economy and the people therein. Therefore, since national economies contribute to the global or international economy, financial frauds anywhere will result in a negative impact on the international economy.
Such financial statements that are crucial to an organizations accounts department include the balance sheet, the cash flow statements, profit and loss accounts, and the trial balance (Schrader & Toner, 2013). However, the process is not always rosy as sometimes it is marred with fraudulent incidences of all sorts with the most prevalent being the revenue recognition fraud.
Nevertheless, many corporates and business leaders have been neglecting these standards thus propagating financial frauds (Pinkasovitch 1). Ideally, the increased use of technology plays a significant role in fostering fraudulent activities in the global market where criminals can now commit wide range and complex financial crimes.
Although more colleges are offering a fraud-examination course as an elective, basic knowledge of fraud detection and deterrence is essential to success in today's professional environment.
This is not to say that management should ignore social responsibility such as protecting consumers, paying fair wages, maintaining fair hiring practices and safe working conditions, supporting education and becoming actively involved in environmental issues.
The author provides the following accounting principle. The matching principle requires firms to apply the accrual basis of accounting where expenses are matched with revenues. For example, the wages of an employee should be reported in the week that the employee worked and not when the employee was paid.
4 pages (1000 words)Essay
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