Everyone loves money. Money is
sometimes the only reason why people go to work. Money not only provides for ourselves,
it also provides for everyone. Money is what makes fuels the economy. Sometimes
money is so important to someone that they will choose to commit fraud. Fraud
is not an accidental error, instead it’s a purpose mistake. Human error and
fraud are completely different. Fraud is on purpose, yet human error is an accident
due to a miss calculation or error. There are two main types of errors in
accounting which are financial statement fraud and assets misappropriation.
Fraud can happen at anytime,
anywhere, and in any business. However, fraud is more likely to occur in a nonprofit
business. The reasoning for that is nonprofits do not have many regulations or
rules which makes it easier to commit fraud and get away with committing crimes.
Fraud can be a single person crime, but it can also be committed by a group of
people too. Many times companies have different people dealing with the money collect,
counted, and imported into the journal entry. This is done for a reason: each
person has a job that contributes to the business and each person that works
with the cash records the amount. Each person recording keeps the other workers
reliable and honest because everything is recorded and able to be checked.
Many times, companies establish
controls that make fraud difficult to commit or recognizable to the eye of the
bosses. Business will do this by creating a business culture by the way they
treat their employees, function their business, and their relationships with
their clients. Employees will learn from whom they are led by. Many companies
will try discover the variety of ways that fraud could be committed and ways
their business could be exposed. Once
they are able to figure out those ways, the company is able to establish
controls to make it difficult or even impossible commit fraud. The company also
needs to keep checking and discovering new ways. The Sarbanes-Oxley Act that was
made in 2002 establishes rules that need to be followed and accountants look
over businesses information by making sure that everything is recorded
accordingly. This act has helped and contributed to stopping fraud within
businesses. Fraud is a crime and is something that does occur frequently.
People should not be able to get away with fraud. Businesses need to be aware
that it can happen anytime, anywhere, and even in group and realize how vital it
is to have controls.
