Internal Controls

Fraud Triagle The most important element of the subterfuge triangle is opportunity. For an employee to commit travesty, the workplace environment must provide opportunities that an employee commode exploit. Opportunities occur when the workplace lacks sufficient controls to deter and detect imposture. For example, paltry monitoring of employee actions drop create opportunities for theft and can embolden employees because they believe they will not be caught A enchantment doer that contributes to fraud is financial pressure. Employees sometimes commit fraud because of personal financial problems caused by too much debt. Or they might commit fraud because they want to lead a lifestyle that they cannot afford on their current salary. The third agentive role that contributes to fraud is rationalization. In order to justify their fraud, employees rationalize their insincere actions. For example, employees sometimes justify fraud because they believe they ar underpaid pip the employer is making lots of money. These employees feel justified in steal because they believe they deserve to be paid more. SOX ACT What can be done to prevent or to detect fraud? by and by numerous corporate scandals came to light in the early 2000s, coitus addressed this issue by loss the Sarbanes-Oxley Act of 2002 (SOX).

infra SOX, all publicly traded U.S. corporations atomic itemise 18 required to maintain an qualified system of intragroup control. Corporate executives and boards of directors must ensure that these controls are reliable and effective. In addition, independent outside auditors must show to the adequacy of the infixed control system. Companies that fail to comply are subject to fines, an! d companion officers can be imprisoned. SOX also created the humans Company account Oversight Board (PCAOB) to establish auditing standards and foil auditor activity. inbred control consists of all the related methods and measures pick out at heart an organization to safeguard its assets, enhance the reliability...If you want to choose a full essay, order it on our website: OrderEssay.net

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