An Investigation Report on Corporate Fraud at Saudi Telecom Company

This report analyzes the corporate fraud case at Saudi Telecom Co. The assignment focuses on an accounting scandal involving misrepresentation of revenue, resulting in a significant financial loss of approximately $380 million. The fraud was detected through investigations by the capital market authority. The report highlights the impact of the fraud on the accounting and finance systems, emphasizing the importance of implementing effective accounting systems and business policies to mitigate such risks. It suggests that the lack of expertise in the accounting department and the CEO's oversight were major contributing factors. The report recommends the adoption of strategic policies and finance systems to prevent future occurrences of corporate fraud, emphasizing the integration of business operations into financial management and the need for transparency.

Running head: REPORT ON CORPORATE FRAUD
REPORT
ON
CORPORATE FRAUD
Name of the Student
Name of the University
Author Note:

1CORPORATE FRAUD
Summary of the case:
In recent years Saudi Arabia has faced several corporate frauds in their banking
industries, however the accounting scandal of Saudi’s one of the largest company Saudi Telecom
Co. is one of the most significant cases. While analyzing the case scenario it is observed that in
the 2013, Etihad Etisalat popularly known as Mobily has pointed out a major scandal at Saudi
Telecom Co. where an account fraud has been detected. The primary reason behind this fraud
was lack of expertise in the accounting department of this company as well as the careless
attitude of the CEO towards the finance department of Saudi Telecom (CEO suspended at Saudi
telecoms group hit by accounting scandal 2020).
How fraud has been detected?
Followed by the above discussion it is observed that almost $380m has been wiped due to
the occurrence of the mentioned fraud. While analyzing the primary reason behind this fraud it is
observed that due to miss-account of revenue this problem has raised. Thus, it is very prominent
that the company has majorly impacted the count of sales as well as other organizational
expenses and profits. According to the data shared by Mobily it is determined that the amount of
fraud wad nearly equal to the 30% profit of the past year. Primarily the fraud has been detected
via the investigation conducted by capital market authority however, even after the detection they
have not publically disclosed the concern for many months (Alotaibi 2019).
Impact of accounting and finance system:
Followed by the above identification it can be stated that this fraud has majorly caused
due to the lack of concentration in accounts department of Saudi Telecom Co., along with this
lack of expertise has also been determined which has majorly impacted the accounts of the

2CORPORATE FRAUD
company. While analyzing these concern it is identified that the incorporation of effective
account and finance system would have surely helped the company to avoid this scenario. As the
finance systems offers several benefits like easy access of data, effective analysis of account
data, information transparency, accounting flexibility, improved decision making approach as
well as it helps to integrate the business operations into the financial management. Thus,
followed by this discussion it can be stated that the adoption of accounting system would surely
help the organization to avoid the possibilities of miss-count of the company funds (Odukoya,
Samsudin & Popoola 2019).
Significance of business policy-
Followed by the above identification it is observed that along with the incorporation of
the account systems to mitigate these problems, the adoption of effective policies would also
help the company to eliminate the possibilities of corporate fraud. While investing the case
scenario it is identified that the CEO of Saudi Telecom Co. has fired because of the miss-leading
of accounts team of the company. However, if there was any strategic policy to structure the
working process of the business this fraud could be eliminated. Thus, it is recommended to the
organization to effectively incorporate the strategic policy which will significantly strategies the
supply and the expenses of the organization (Zerban 2017).

3CORPORATE FRAUD
Reference:
Alotaibi, H. J. (2019). Foresightful strategic planning and organisational flexibility in the saudi
telecommunications sector under turbulent economic conditions. International Journal of
Advanced Research in Management and Social Sciences, 8(11), 114-134.
CEO suspended at Saudi telecoms group hit by accounting scandal. (2020). Retrieved 21
February 2020, from https://www.ft.com/content/c186cf94-69cc-11e4-8f4f-00144feabdc0
Odukoya, O. O., Samsudin, R. S., & Popoola, O. M. J. (2019). A conceptual examination of the
effect of problem representation on mindset and fraud risk assessment in the Nigerian
deposit money banks. Asian Journal of Multidisciplinary Studies, 7(11), 25-37.
Zerban, A. M. (2017). Enron of Saudi Arabia: Corporate Accounting and Auditing
Failures. Open Journal of Accounting, 7(01), 1.