ACC 578-Financial Statement Fraud

ACC 578-Financial Statement Fraud

ACC 578-Financial Statement Fraud Financials statement fraud is one of the most common forms of fraud that occur in companies. Financial statement fraud involves careful manipulation of the accounting system with an aim of making the financial status of the company appear healthy to investors and the shareholders. Some form of financial statement frauds perpetrated in the past include disguising loans as sales revenue, concealing losses, deliberate omission of financial figures and/or transactions, falsification of figures, lack of adherence to accounting principles, and other forms of frauds. The Sarbanes Oxley Act of 2002 was introduced to deter companies from fraudulent reporting of financial figures. The Act, however, may not be able to deter acts of fraud where the management is involved in perpetrating such cases. This paper will assess two fraud cases related to financial statement fraud, specifically the Satyam Scandal of 2009 and the American International Group fraud which occurred in 2005.             Satyam Computer Services was an Indian-based company with...
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Acc578-Elements of an effective fraud policy

Acc578-Elements of an effective fraud policy

Elements of an effective fraud policy Fraud can be generally be defined as use of deception with the intent of making personal gains or causing loss to another person or an organization. There are many types of fraud such as those committed by employees against employers, businesses against customers and investors and other forms of fraud. In order to curb cases of fraud, businesses must come up with appropriate fraud policies. This letter will give in detail the elements of an effective fraud policy. Policy statement             According to Dawson (2015), an effective fraud policy should have a policy statement. A policy statement outlines the core responsibility of the management to prevent or detect cases of fraud in the organization. The management should be aware of the types of fraud which are likely to occur within their organizations and implement appropriate measures for prevention and detection. The management cannot delegate this task to outside parties since it is an integral part of the...
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Fraud Prevention and Detection Policy-ACC 578

Fraud Prevention and Detection Policy-ACC 578

Fraud Prevention and Detection Policy-ACC 578 Elements of an effective fraud policy Fraud can be generally be defined as use of deception with the intent of making personal gains or causing loss to another person or an organization. There are many types of fraud such as those committed by employees against employers, businesses against customers and investors and other forms of fraud. In order to curb cases of fraud, businesses must come up with appropriate fraud policies. This letter will give in detail the elements of an effective fraud policy. Policy statement According to Dawson (2015), an effective fraud policy should have a policy statement. A policy statement outlines the core responsibility of the management to prevent or detect cases of fraud in the organization. The management should be aware of the types of fraud which are likely to occur within their organizations and implement appropriate measures for prevention and detection. The management cannot delegate this task to outside parties since it is an...
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Successful AIS Implementation

Successful AIS Implementation

Successful AIS Implementation  Identify three to five (3-4) factors that contributed to the accounting information system failure within the business that you have identified. Indicate the impact to the business. Provide support for your rationale. Avon is an outstanding international beauty company that was founded over 100 years ago and has over 6 million sales representatives. The organizations require a system that fits well with the evolving changes in the beauty world. The accounting information system doesn’t include much utilization of the machines; the machines are just devices in the system. They are not the key drivers during the whole process (Bucker & International Business Machines Cooperation, 2009). The accounting system may be traditional or not genuinely agreeable with the administration system, which may cause system disappointments, as these administrative plans are concentrated around the total disappointments of different firms. Example is Enron and other organizations. The mechanized accounting systems are more valued than the manual accounting systems and the organization may embrace...
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Acc 564 Assignment 3  Fraud in the Accounting Information System

Acc 564 Assignment 3  Fraud in the Accounting Information System

Acc 564 Assignment 3  Fraud in the Accounting Information System In September 2008, one of the largest corporate scandals unfolded in the United States. Lehman Brothers, a global financial services firm was declared bankrupt. This was unanticipated considering the company’s financial statements indicated it was financially sound. What was not known, however, is that over $ 50 billion in loans had been carefully concealed as sales (Kimberly, 2011). In the ensuing scandal, Lehman allegedly conspired to disguise its true financial position by disposing off its toxic assets in the short term. The toxic assets costing the company $ 50 billion were sold off to Cayman Island banks on the condition that the company would buy them back. This created a false impression that Lehman had disposed off the toxic assets worth $ 50 billion, and hence the sales figure of the same amount reflected in its financial statements. The scandal was perpetrated by Lehman executives with the help Ernst & Young,...
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OMM640 Business ethics and social responsibility

OMM640 Business ethics and social responsibility

OMM640 Business ethics and social responsibility Ethics, Compliance, Auditing, and Emerging Issues Describe an emerging global risk for 2015 and beyond Technology risk is insofar the greatest challenge facing majority of businesses across the world, yet many remain oblivious to the risks they are exposed to. Technology risk includes cyber attacks, data fraud/theft, critical information infrastructure breakdown and misuse of technologies. Technology risk has the greatest financial impact on a company, in addition to time consumption and loss of trust from customers. The impact and likelihood of a cyber attack in the modern business environment is estimated at above average, and the threats are becoming more each day. This is compounded by the fact that businesses have become more hyper-connected, and sensitive personal and consumer data is currently being stored in cloud where hackers can gain access from any part of the world. Currently, more businesses continue to lean on technology as an integral part of their daily operations. This is due to the...
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Acc 564  Hacking the AIS

Acc 564 Hacking the AIS

Acc 564 Hacking the AIS Assignment As more businesses lean on technology to support their operations, unexpected challenges are emerging in the technological environment. Hackers, whose identities in most incidences remain anonymous, have become a major threat in the operations of most businesses. On November 2013, a cyber-attack on Target Company threatened to throw the company in a financial crisis, coupled with lack of confidence from majority of its customers. The cyber-attack on Target Company resulted in over 40 million customer accounts becoming compromised (Ziobro, 2014). Hackers were able to gain sensitive information of cardholders following the attack. This attack was discovered three months later, and resulted in loss of customers’ money. Target Company bears a huge responsibility in terms of effectiveness of its response to the security breach. Reports indicate that Target’s security team had earlier learnt of a breach in their system but downplayed the security warnings (Ziobro, 2014). The lack of follow-up gave hackers the upper hand where they...
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Information Needs for the AIS -Acc 564

Information Needs for the AIS -Acc 564

Information Needs for the AIS Accounting information system (AIS) is a computerized method of collecting, processing, storing, retrieving and distribution of accounting data to users in an organization. An information system makes it possible to collect and manipulate financial and accounting data in ways that it is usable to end users. The functions of an accounting information system can be put into three major categories: First, AIS ensures collection and proper storage of an organization’s financial data. Secondly, the system ensures that information is available to end users for decision making. Information may be supplied inform of financial statements or reports. Lastly, AIS ensures that controls are in place for proper processing and retrieval of information. In many organizations, problems with the accounting information systems are encountered although seldom in established organizations. Corporate leaders are tasked with the responsibility of making critical decisions from the information they receive from AIS. Corporate leaders often make improper assumptions when handling accounting information systems and...
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Comprehensive Audit Plan : ACC 574 Assignment 5

Comprehensive Audit Plan : ACC 574 Assignment 5

Comprehensive Audit Plan :  ACC 574 Assignment 5 Make recommendations on the requirements for the feasibility study and discuss the Pros and cons for the design of SDLC with a recommendation for an optimal time frame for each stage. A feasibility study is a basic audit procedure that helps the organization in compliance and preparation of a final audit. A feasibility study answers the basic question; can it be accomplished given the current resources? The feasibility study enables the management to determine all the resources necessary for the accomplishment of the tasks and the viability of the project (Kendall, & Julia, 2005). The following are the basic requirements for a feasibility study. Analysis of the existing information system For an organization to develop a new and advanced system, the existing system must be analyzed in detail in order to identify its weaknesses in detecting and averting fraud. The crucial thing in this step is for the team to comprehensively review the interactions of...
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Assignment: 4 Emerging Auditing Issues

Assignment: 4 Emerging Auditing Issues

Assignment: 4 Emerging Auditing Issues The Public Company Accounting Oversight Board The role of PCAOB in improving reliability of audited financial statements The Public Company Accounting Oversight Board (PCAOB) is a non-profit private corporation formed under the Sarbanes-Oxley Act (SOX-2002) to conduct supervisory roles to all accountants or auditors involved in producing audit reports for public companies (Palmiter, 2008). The board’s core mandate is to ensure that the independent auditors observe due procedures while auditing public companies. In addition to this, the body registers, conducts investigations and issues disciplinary measures to public accounting firms found guilty of auditing malpractices (Palmiter, 2008). The board also ensures that public accounting firms observe the SOX Act to the latter. The establishment of PCAOB has greatly enhanced reliability of audited financial statements for the public users of information. The following section provides a detailed analysis of the important role played by PCAOB. PCAOB routinely conducts inspections upon public accounting firms to ensure that they adhere to all the...
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