Accounting fraud is an intentional manipulation of the financial records so that it looks improved compare to the previous ones. The fraud involves the employee in a business organization embezzling or misappropriating the business resources. Those holding higher positions in financial and accounting offices are the major promoter of the accounting fraud. There has been reported reports of the collapse of large companies mainly attributed to the impact of the fraud; the fraud only enriches oneself. On the other hand, there is deteriorations and failures in the business performance.
Is the past years, cases of payroll fraud has increased significantly. In this situation, the staff creates the payrolls of non-existing workers with the aim of receiving the money illegally in the end. The persons involved in the payroll fraud receives an additional payment of their salaries. There ...view middle of the document...
Unfortunately, the impacts are realized after a serious financial loss by the business organization. The prevalence of fraud in the accounting is easily managed and controlled by the following means.. Firstly, the change of lifestyle of the employee to a life of extravagant. For instance, the clerk who initially earned less money and lived simple life becomes questionable once his or her life improves all over a sudden to a point of suspicions. There is need of tracking all the factors that led to such flashy life over a short period. Secondly, the use of the software with the advancement of the technology. The bookkeeping method has been encouraging fraud in most of the accounting sectors. The device will track and detect all the activities in the office. Information recorded is used later in tracing the offender accountability. The use of the accounting software will help in solving the modern business problems associated with the fraud.
Thirdly, the internal controls are used in guiding the behaviors of the employees by ensuring the integrity of the account records is put in place. Consequently, the planned programs are well guarded and implemented by the whole business organization fraternity(Ramaswamy, V. 2005). Fourthly, creating awareness to the employees through effective education will make them know the negative impacts brought by the fraud within the business organization. The punishment of the offenders should be emphasized to make everyone alert and at risk of involving in any form of fraud.
In conclusion, the accounting fraud has led to the failure of most business organizations. The fraud has been encouraging the wrong and the misuse of the business organizations funds. Top officials have the ringleaders in the promotion of the vice that has greatly hit the economic growth of the business body. The incorporations of the measures in curbing the accounting fraud by the whole business system must encouraged by all regardless of their positions. Successes in the business organization come after the elimination of frauds.
Singleton, T. W., & Singleton, A. J. (2010). Fraud auditing and forensic accounting (Vol. 11). John Wiley & Sons.
Ramaswamy, V. (2005). Corporate governance and the forensic accountant. The CPA Journal, 75(3), 68.