Financial Fraud What is financial fraud?

Identifying Fraud

Effect on Economy

Are we Protected?

Identity Theft in Business

Enron Scandel

Loss Prevention Planning and Strategies

Financial Fraud

Financial fraud was an unfamiliar notion prior to the 2000's, but has become a controversial and familiar term due to economic woes, public disapproval and revamped financial regulations. Light was shed on some of America's top organizations intentionally changing their accounting books to look more attractive to investors than they were in actuality. Institutions and/or ranking officials at institutions were falsely publishing financial statements with fabricated values and profits presenting the illusion that investments with these entities were producing and would continue to produce consistent returns. In addition to recurring fraudulent activity, new highs for deposits of fraudulent checks were recorded by banks nationwide.

Government agencies aim to set regulations, enforce regulations, and protect American businesses and consumers from fraudulent activity. Laws are set in place to protect against fraudulent activity of all kinds, ranging from check fraud to altering and tampering of financial statements. Financial fraud is everywhere that individual's lack moral and ethical responsibility and as an American citizen it is important to understand financial fraud, examples of financial fraud and how to protect and stay away from financial fraud.

What is financial fraud?

Finding out the definition of fraud is very important. What is financial fraud? Financial fraud is considered to be a situation in which the ethical and legal management of financial resources is not occurring. In many nations all over around the world, this kind of fraud takes place by reason of measured decisions and actions made by individuals who are managing most of the money and not to mention the other assets on behalf of clients or employers. Accounts Payables and Receivables are purposely changed in order to hide the fact that monies taken in by the corporation are abstracted for the personal use of someone that is involved in the accounting procedure. In some circumstances, two sets of accounting records could possibly be preserved.

Research shows that what happens is that one set is a true and correct accounting, although the other is the changed accounting that can be utilized to turn away suspicion of some type of illegal activity. (Elliott, 2013) With that said, financial fraud is an activity that can occur to anyone who has money. Most people, right away would think about big organizations and the guys taking millions and millions of dollars, but at the same time, research shows that there is way more circumstances with the average American. Further investigations shows that America was and still is a nation that has made it so easy since most people do things by using a lot of credit. Inferred is a precondition knowledge that the funds are obtainable. This is something that goes on every day and many in business are not aware of it. Then once the objective is done they will be able to just bail from the situation.

Identifying Fraud

The hard part is recognizing fraud. It is difficult if companies have accounting records that are lengthy. "The financial loss is from time to time wisely hidden in the accounting records that are being utilized when it comes to tracking activity consisting of the resources, permitting it to last until a great deal of money and other properties are drawn off and no longer in the control of the proprietor. Business fraud of this kind could be directed by any employee or company officer who has admission to corporate resources, and may carry on for a lengthy length of time before turning out to be apparent. (Yallapragada, 2013) As a result it is vital to be cautious in this odd economy with the selections you make concerning a person money. Almost everyone wants a person's hard earned money and some are just lying in order to get it. However, this is not to say that every business is immoral but nevertheless in this day in age people need to be very cautious and make intelligent choices with the money they use. It is obvious that the government has a lot of agencies and new laws in order for them to keep up and enforce financial fraud.

Are we protected?

It is clear since this activity has become the norm that companies want to be able to find ways to cover and protect themselves. After all, no business wants to be scammed because in the end they...

With financial fraud going on every were what can business do? How exactly can these businesses protect themselves and how is the government protecting them? A clear-cut audit confirms all the liabilities and assets. Inventory is added up. Accounts receivable are long-established with clienteles. Cash is normally counted, and not to mention that all liabilities are usually confirmed.
The difference among liabilities and assets is stockholders' capital and equity stock. Any decrease or increase in the equity since the last audit is loss or profit. (Elliott, 2013) Most businesses would understand that this is step one for discovering a business accounting practice. It is vital to appreciate an institution from the inside out before you participate and make a choice with your money. It is extremely significant to learn about a business or individuals paper trail. What types of approaches are these companies using to make sure fraud does not happen? Research shows that there are a lot of businesses that want to recognize rather or not if there is beyond one person that is actually double checking all of the numbers? And is everything in fact adding up like it is supposed to be doing? All of these are questions that companies will need to ask so as to completely trust a business. Many experts in business make the point that organizations should not be afraid though because they believe that the government has their back and does most of the research for everyone. Even though there are no global statistics charting white-collar crime arrests, the amount of people that are being trained to be able to find out the different kinds of accounting shenanigans have been exploding ever since the money crisis.

However, the U.S.-based Institute of Certified Fraud Examiners, which are people that are highly skilled in training accountants in investigation of fraud, has 50,000 members all over the world -- bringing in 14,000 new members last year by itself" (Yallapragada, 2013)Although to some businesses it is really scary thing to recognize how money is able to immortalize individuals and then start causing them to do crazy things. At least there are some individuals that are willing to follow all the rules and regulations. They believe that some of these places will actually keep them protected from fraud and at the same time make sure that business stays honest. Some of these business welcome the government getting involved in order to make a great team with the government checking out various business and arming themselves with knowledge so that they will make themselves be these hard targets for financial fraud.

Recognizing Theft in Business

What is considered to be identity theft? As stated by the World English Dictionary, identity theft is when a person choses to take on the identity of another person by utilizing their personal documents or data in order to get a hold of some money or even be able to get some credit without that person's information (Laufer, 2011). Nevertheless, business identity theft is the criminal act of robbing the business's name, altering registration history and starting credit with that name for the use of buying items that may be bought or swapped for cash. Many businesses are unaware that this kind of identity theft is able to have some kind of a domino effect and then a break down of an entire business, in addition to, any financial institutions and retailers that are taking part in any form of business transaction with this type of entity.

It can outcome in the obliteration of the company's status, their future credit relationship with retailers and banks, operational issues, workers and even the customers, not to mention the quantity of money and the time it could take to repair the injuries (Yallapragada, 2013). In 2012, close to 3,000 corporate administrators were targeted in an email scam that had a list of names of all the top managers, along with their phone numbers and their organization name mentioning that they were being order to come to court for some sort of legal violations that were taking place against their business.

The email made it necessary for the recipient to be able to just click the link in order for it to install an add-on in order to view the summons to court. By approving to the add-on endorsed admission of software that could steal passwords and usernames when online banking and other programs that required executive credentials were visited (Laufer, 2011). Enron's accounting pattern and Madoff/Ponzi investment scams are only a few of the business…