Accounting Fraud Reflection - Case Analysis, Avoidance & Opinion

This assignment analyzes financial statement fraud, drawing from a provided research paper on US and European cases. The paper reveals that senior management often orchestrates fraud, primarily through false sales reporting, motivated by external pressures. The author reflects on the importance of internal audit committees in detecting fraud and the severe consequences for those involved, including investor losses and reputational damage. The assignment also explores ways to prevent fraud, emphasizing the need for internal controls, segregation of accounting duties, employee training, and a strong ethical environment. External audits and management's implementation of internal control features and ethical behavior are also highlighted as crucial preventative measures. The assignment stresses the importance of timely fraud detection and prevention to protect stakeholders and maintain corporate integrity.

Accounting Fraud

Contents
Accounting Fraud............................................................................................................................1
Reflect on the articles......................................................................................................................3
What is your opinion about cases described in the paper?..........................................................3
Discussion on the ways through which the fraud cases can be avoided......................................4

Reflect on the articles.
What is your opinion about cases described in the paper?
The present case is based the financial statement fraud that has become one of the main concern
for the companies in the present scenario of doing business. This research paper was based on 14
companies which were subject to official investigation because of the fraud that they have done
for the company. This was seen that the research was founded that most of the senior
management in the organisation were responsible for the fraud that happened in front of them.
This was mainly done through the process of recording the false sales in the financial statement
of the company. The meeting of the external forecast was considered as the primary factor for
motivation. This is seen by the association of certified fraud examiners that most of the cases of
the fraud existed where the owners or the executives of the company were involved in it. Also
this was seen that in the most of the cases the companies where the fraud occurred involved the
CEO, President or the chief financial officer of the company.
Hence according to me this is seen that the companies which are engaging themselves in fraud
are doing this due to the force of the owners or the managers of the company. Hence according
to me the companies are breaching the corporate governance responsibility of the company
towards the stakeholder’s due to which they are losing the investors in the company. It was seen
that the fraud prediction was based on the conditions of the entity where the managers of the
company are motivated to perform the function of fraud in the company. In my opinion the audit
committee plays an important role in detecting the frauds that appear in the company hence this
is seen that it is one of the important part for the company to adopt and make the internal audit
committees which helps in controlling the internal environment of the company. From the report
this is founded that the consequence of the fraud that happens in the company are very severe
and due to which the person who are involved in it also feels the same. This is seen that when the
accounting irregulatorie’s are detected in the company then it results in depletion in the interest
of the investors in the company. This also make the person who is involved in the fraud to resign
from the company and impacts the goodwill of the company as a whole. Hence this is seen that
the financial fraud should be detected henceforth before appearing and the person should
consider the things before happening of the fraud in the company

Discussion on the ways through which the fraud cases can be avoided.
This is seen that the financial statement fraud is considered to be one of the most important
elements which requires by the company to detect henceforth and prevent it on timely basis. This
is seen that the company should identify the internal audit committee which would consider the
fact and analyse the situation which could result in the financial statement fraud within the
company. The company should classify the transactions which could result in fraud and audit
these transactions in best manner. The company should make the policy and the rules and
regulations which helps in achieving the objective of maximising the goals and reducing the
fraud within the company. The companies for the purpose of reducing the fraud in the accounting
should segregate the accounting duties through which there would not be one person responsible
for the accounting. Also the company should maintain the internal control practices through
which the each department would be controlled. The company should also train the employees of
the company to prevent the fraud practices that happens in the company. The company should
also educate the management on the three indicators of the fraud. The management must
implement the internal control features in the in the company which would help in depicting the
fraud that when it is done. The management of the company should also establish the strong
control environment in the company which demonstrate the ethical behaviour. The company and
the management of the company should initiate the annual examination of the financial statement
by the outside party who would be unbiased and would work for finding any fraud that comes in
front of company.