COPORATE CRIME AND INTERNAL CONTROL

COPORATE CRIME AND INTERNAL CONTROL

1. ACCOUNTING FRAUD

   • intentional misrepresentation or alternation of accounting records
   • make a company's financial performance seem better than it acctualy is
   • 'cooking the book'
   • EMBEZZLEMENT
     • misappropriation of a company's fund by and entrusted person within the organization
     • stealing cash within making a record of the transaction
     • staff claiming expenses for items that are not business related
     • payroll fraud
     • fraudulent vendor purchases
     • improper use of client's funds by their investment advisers
   • under payment of tax liability
   • tax evasion
     • filling tax forms with false information to illegal
     • transferring property to avoid tax obligations
     • by resorting to transfer pricing
       • setting the price for goods and services sold between related entities

2. How can fraud be prevented?

   • Require 2 signatures on any cash disbursement
   • Conduct surprise inventory audits
   • Require 1 managers to approve any write-off
   • Rotate employees
   • Match all receiving reports with the general ledger

3. INTERNAL CONTROL