These types are: timing differences - recognition of revenue early or recording expenses in the wrong period; fictitious revenues - revenue fabrication, adjusting sales return and allowances provisions and lowering revenue adjustments; concealed liabilities and expenses - omitting liabilities or expenses from the financial statements, understating warranty and product liabilities; improper asset valuations - overstating cash, inventories, receivables or fixed assets; and improper disclosures - failure to disclose significant events, related party transactions or changes in accounting policies
They are all designed to misrepresent the financial strength or performance of the company in order to make the company appear more valuable to stockholders, potential stockholders or higher-level management. Cases illustrating some of these forms of fraud are outlined below.
Enron.
The Enron case was one of most publicized and complex fraud cases in recent years. Once detected, it resulted in the collapse of the company, billions of dollars of losses to both employees and stockholders and federal convictions both within and outside of the corporation. Enron's financial problems began as a result of being heavily invested in several markets including natural gas, electric, broadband, futures, coal, paper, steel and water (The Rise and Fall of Enron). In order to invest, Enron needed capital, which made a good credit rating critical to the future growth and success of the company. As Enron became highly leveraged, the management team searched for creative ways to improve the company's leverage ratios.
One of the ways they did this was to reduce the company's total debt-to-assets ratio and increase the return-on-assets ratio. Enron's CFO, Andrew Fastow (with the blessing of CEO Jeffrey Skilling and Chairman, Kenneth Lay), created limited partnerships where they could transfer many of Enron's investments and related debt to.
MARITIME FRAUDS IN CHINA MARITIME FRAUDS IN CHINA Thesis statement: The author explores the causes and basic types of Maritime Frauds in China and puts forward some ways to be on guard against frauds. ... Documentary Fraud B. Ship Chartering Fraud C. Embezzlement Fraud 1. Scuttling Fraud 2. ...
The tooth fairy is an important mythical character in the majority of every young child's life. Children around the world find joy in ripping out their adolescent teeth in hopes of receiving a gift from the tooth fairy. I was one of those children. I would anxiously pull out my teeth one by one and ...
(Internet Fraud) Another popular scheme is the "Work At Home" type of trick. ... (Internet Fraud) The most severe form of internet fraud, involves identity theft, which is illegally getting a hold of someone's personal information in some way that uses fraud or deception and is used for financial gain. ... (Identity Theft and Fraud) Internet fraud can also be committed through the online investment scheme. ... (Internet Fraud) All these cases of internet fraud have prompted many people to the disillusionment that purchasing products online is not safe anymore. ... The fifth poin...
Protecting Your Bank's Online Identity: A Vital Step In Safeguarding Against Cyber fraud. ... Summary The article that I have chosen deals with important steps a bank needs to take to protect its customers from cyber fraud. ... The OCC recognized that fraud on the Internet was a serious problem and fictitious websites were using similar domain names of banks to mislead the customer into their site to get their personal and financial information. ... It is important to report information and suspicious activity because that is the first step in preventing massive fraud. ... Fraud ...
(Phrack 25,p.6) Computer fraud loss is estimated at $555,000 million annually with each individual case of fraud costing $100,000. ... This example is one of the largest electronic bank fraud cases on record. ... Proper internal controls reduce toe opportunity for fraud. ... Even secured transactions are not always safe from fraud. ... Although no security measure is fool proof, steps can be taken to reduce the chances of becoming a victim of fraud. ...
Still there is not really any substantial evidence that fraud risk or actual fraud had been lowered because of the Sarbanes-Oxley Act of 2002. ... The SOX should encourage most organizations to use diligence to try and prevent fraud or theft. ... More focus on controls will probably lead to more reliable financials and a reduced risk of fraud, and it is to be believed that more legislation is not the answer to the issue pertaining to fraud within organizations. ... Proactive fraud prevention implemented through corporation management will have to be the key to prevent fraud within organization...
Still there is not really any substantial evidence that fraud risk or actual fraud had been lowered because of the Sarbanes-Oxley Act of 2002. ... The SOX should encourage most organizations to use diligence to try and prevent fraud or theft. ... More focus on controls will probably lead to more reliable financials and a reduced risk of fraud, and it is to be believed that more legislation is not the answer to the issue pertaining to fraud within organizations. ... Proactive fraud prevention implemented through corporation management will have to be the key to prevent fraud within organization...
In today's society, newspapers around the world are filled with stories of fraud and financial misconduct. ... This is why fraud risk assessment is such an important process in all organizations. ... Requiring mandatory vacations can also uncover a fraud scheme. ... Fraud is an intentional misrepresentation by one person which results in gaining advantage over another person (Lawrence, 2004). ... While some of these prevention methods are more expensive than others, in the long run fraud prevention is cheaper than fraud detection because by the time most frauds are detected, substan...
There is a new type of fraud going on in America today, it has nothing to do with insurance or phony salesmen trying to sell a bogus product. ... The article that I read was about paternity fraud, it was called "Fair Is Fair, But its Often Sad, Too", by Kathleen Parker. ... He has now brought a lawsuit against the Childs mother for paternity fraud. ... The article itself really does not take a position on the topic of paternity fraud, it more or less explains this one mans struggle with it. ... Laws should also be made against this terrible con that women are pulling, who knows how many men ha...
