UNCC 300 - Examining Financial and Business Fraud Globally

This op-ed critically analyzes fraud within financial and business contexts, highlighting its prevalence and impact on organizations globally. It references the HiH Insurance failure in Australia and fraudulent activities within the National Australia Bank as examples. The essay draws upon the Treadway Commission's definition of financial statement fraud and discusses the challenges in identifying and classifying fraudulent activities, noting the importance of intent. It also explores the fraud triangle, emphasizing the roles of incentives, opportunities, and rationalization in enabling fraud. The piece further examines how fraud often begins modestly, exploiting ambiguities in accounting practices, and how it can escalate over time. The essay concludes by referencing academic literature on the topic, providing a comprehensive overview of the complexities and challenges associated with fraud in the financial and business world.

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OP-ED: FRAUD IN A FINANCIAL AND BUSINESS CONTEXT
Fraud in a financial and business context is common in some organizations. The expression
"warnings of fraud" is found in books and articles on fraud. Fraud is largely a concealed
movement and fraudulent financial statements do not generally become visible. This kind of
fraud can have intense effect for companies: despite the fact that the Specialized Fraud
Assessors have observed deceitful financial reports to be the slightest usually revealed
deception, it has the most noteworthy middle misfortune at $1 million.
The professional code of conduct and advocacy states that fraud financial reports can be hard
to identify, is roused via various factors and is accomplished from multiple points of view.
Financial statement deception is also present in Australia (Keith & Annmarie, 2013).
Fraud in a financial and business context is illustrated in HiH Insurance; because of the
insurance company, one of the greatest corporate disappointments in Australian past,
substantial misstatement of advantages remained excluded in the annual changes (Mihret,
2014).
In this way, they remained excluded in their appraisal of reality as well as decency of the
financial reports. Staff hid remote trade exchanging misfortunes in National Australia Bank
through false exchanges and frameworks' controls, which were definitely not grabbed by
outside reviewers, bringing about deceiving reports. The overview of fraud in Australia by
KPMG discovered six occasions of financial report fraud of the operational reactions.
The external auditor was not able to evaluate the misfortunes from such deceit. There are
comes about for the connection amongst fraud and administration factors in Australian
organizations (Peltier Rivest & Lanoue, 2011).‐
Fraud in a financial and business context in different jurisdictions do not have a particular
wrongdoing of financial statement fraud. Culprits are accused of burglary or the dishonorable
keeping of books and records relying on the idea of the fraud (Rosalind, 2004). Financial
statement fraud contrasts from different frauds in that fraudulent financial detailing are

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submitted, as a rule by the administration, to cheat financial statement clients while workers
confer misappropriation of advantages against an element, frequently.
This opinion piece utilizes the Treadway Commission's meaning of financial statement fraud:
"Financial statement fraud is a purposeful demonstration or oversight those outcomes in
physically deceptive financial statements". While it could be contended that this definition is
outdated, later definitions are very little unique.
For instance, the meaning of fraudulent financial revealing in section 8 of Australian Auditing
Standard (AUS) 210 is “. . . deliberate misstatements including oversights of sums or
divulgences in the financial answer to hoodwink financial statement clients".
Fraud in a financial and business context is frequently hard to spot or there is an oversight, as
the inspiration driving the activity must be considered. The characterization of an activity as
being fraudulent may rely upon the inspiration driving it (e.g., was it inadvertent or deliberate.)
Similarly, this opinion piece expects that US firms subject to Securities and Exchange
Commission (SEC) implementation activities under Rule 10(b) have been associated with
financial statement fraud in which the demonstrations or oversights bringing about the fraud
were purposeful (Shaoul, Stafford & Stapleton, 2015). While this is disentanglement, it is
important, as the aim is hard to demonstrate. This presumption is connected to the European
cases in this paper.
Fraud in a financial and business context does not begin with deceptive nature; rather, it might
start with a strain in meeting monetary marks and a dread that inability in meeting such
objectives is seen as indefensible. Then again, the culprit of fraud might be driven by
untruthfulness and individual pick up (for instance, to secure rewards) instead of by weight
from the association.
This resounds with the fraud triangle, which distinguishes three variables: private non-sharable
motivating forces or weights, relevant chances to confer fraud and capacity to defend fraud
(Simser, 2011).

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Fraud in a financial and business context tends to begin modestly. It starts in territories of
largely acknowledged bookkeeping practices (GAAP) which contain ambiguities (aside from
purviews with extremely prescriptive bookkeeping models). Tara & Lynn (2016) contend that
bosses may abuse the uncertainties and accessible decisions to introduce the pecuniary image,
which hits their financial objectives. The isolating line between "income administration" and
"profit control" is tight. Passage 10 of AUS 210 particularly remarks on this example of
beginning little, with weights and motivating forces uplifting the movement.
When does sharp practice move toward becoming fraud? As soon as financial statement fraud
has been submitted, it is hard to stop, as most fraud methods include "getting" from one period
and "crediting" to another period. With the progression of time, the sums and number of
individuals included developing and the culprits can just keep on trying to conceal the fraud
(Venancio & Musa, 2014).

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Bibliography
Keith B. & Annmarie R., 2013. Affinity fraud and trust within financial markets. Journal of Financial
Crime, 20(2), pp. 186-202.
Mihret, D. G., 2014. National culture and fraud risk: exploratory evidence. Journal of Financial Reporting
and Accounting, 12(2), pp. 161-176.
Peltier Rivest D. & Lanoue N., 2011. Thieves from within: occupational fraud in Canada.‐ Journal of
Financial Crime, 19(1), pp. 54-64.
Rosalind, W., 2004. Fraud after Roskill: a view from the Serious Fraud Office. Journal of Financial Crime,
11(1), pp. 10-16.
Shaoul J., Stafford A. & Stapleton P., 2015. Financial black holes: The disclosure and transparency of
privately financed roads in the UK. Accounting, Auditing & Accountability Journal, 23(2), pp. 229-255.
Simser, J., 2011. Terrorism financing and the threat to financial institutions. Journal of Money
Laundering Control, 14(4), pp. 334-345.
Tara J. S. & Lynn H. C., 2016. Emotional Reactions to Financial Statement Fraud. In: J. Cynthia, ed.
Research on Professional Responsibility and Ethics in Accounting. s.l.:Emerald Publishing Limited, pp.
115-132.
Venancio T. & Musa M., 2014. Board structure and supplementary commentary on the primary financial
statements. Journal of Applied Accounting Research, 15(3), pp. 273-290.