Concideration of fraud in an audit Research Paper

Concideration of fraud in an audit - Research Paper Example FRAUD Fraud is a word used in broader concepts and approaches. It basically refers to any illegal action characterized by deceit and concealment which isn’t conducted under any violence, force or threat. The aim of every fraudulent activity is an undue advantage which could be institutional or personal. (Flostoiu.2012) Characteristics of Fraud: Fraud results in victim that loses a benefit because of the criminal’s fraud. It is represented by a series of illegal actions and irregularities which are all planned with the intention to deceive. Fraud is also referred to activities which involve concealment of information that was to be revealed by an obligation and intended omission of certain information or documents including misstatements and misrepresentation of information. Fraud also includes falsification of financial situations, corruption and theft. It is always important to distinguish between a fraud and error. The results of both error and fraud could be the same , but fraud is committed intentionally while error happens unintentionally. (Flostoiu.2012) Fraud Triangle Theory: A fraud triangle is a model which discloses the factors found in fraudsters at all levels of organization. This theory researched about the factors that force honest people to commit fraud. These factors could be summed as Pressure/Incentive, Opportunity and Rationalization that put an individual in a position to conduct fraud. (Dorminey, Scott, Kranacher & Riley. 2010) In a Fraud Triangle pressure refers to situations that put mental pressure/incentive on an individual which forces him to commit fraud. These situations could include excessive credit card debts, gambling debts, extended unemployment, family or peer pressures, unbearable expenditures and financial difficulties etc. For an auditor, pressure is difficult to identify in a fraudster as there is no personal interaction with him. (Dorminey, Scott, Kranacher & Riley. 2010) Opportunity as the word suggests, is a n instance where the fraudster finds a loophole in the controls which prevent fraud. An employee usually finds a chance where he can commit fraud without being detected. This opportunity for an employee can arise from weak internal controls and inability of frauds being detected, lack of training, weak ethical culture where honesty in doing business isn’t considered a priority and lack of supervision etc. Most opportunities arising situations for fraud include lack of internal controls like segregation of duties not being implemented properly. (Dorminey, Scott, Kranacher & Riley. 2010) Rationalization refers to that state of mind where the fraudster convinces himself that whatever fraud he has committed was either not wrong or even it was wrong it an be corrected later on by returning the money or compensating for it. Another state of rationalization is found when a fraudster convinces himself that he deserves the stolen money. The reason for this rationalization could be the unfair treatment in the organization like a recent promotion or increment not being offered which forces him to believe that has been victimized. (Kassem, Rasha, & Higson, Andrew. 2012) Recent researchers have extended the Fraud Triangle and added a fourth factor to the triangle making it as a diamond. This factor is the capability of the fraudster to conduct fraud. Capabilities include the traits of the fraudster i.e. in presence of the three factors of fraud

Project management Essay Example | Topics and Well Written Essays - 250 words - 1

Project management - Essay Example There will also be constraints if sponsor has not described all the details required for the development of the system. It will therefore mean that more rework will be done which will cause further delay to the project. Constraints will be experienced if key-decision makers will be difficult to contact when issues arise in the project. This will cause time wastage in the project execution. It is expected that these decision-makers will be reachable at any time and in all the development phases of the project. Another constraint that might arise is if the project members will be new to the environment and may take time to learn the new developing environment. This will cause the delay to be experienced in the project execution. Project management services. (2009). Project management process inputs, tools and techniques, amd outputs organized by process groups. Retrieved Febuaryr 25, 2012, from Project management services: