Explain the impact of occupational fraud and abuse on the company. Explain the four potential corruption schemes to be aware of within the company?
Explain the impact of occupational fraud and abuse on the company.
Sarbanes-Oxley Act of 2002 expands the anti-fraud provisions to include an array of fraudulent activities and exposes top-level corporate CEOs to substantial criminal penalties in situations where employees engage in such behavior. These acts apply to all US public companies (including their operations in international jurisdictions) as well as international companies that have registered equity or debt securities with the Securities and Exchange Commission (sec) along with the accounting firms that provide auditing services for them. The reported cost of compliance has been staggering. For example, British Petroleum recently estimated its cost of compliance with the Sarbanes-Oxley Act to be $100 million per year (Forbes 2005). While the cost of compliance is high, the potential cost of noncompliance is even higher.
Companies entrust their employees with assets, information, and customers. Business cannot be done unless companies put trust in people to sell their products or services, deliver them, collect the money, and keep accurate records. Employees must be charged with growing and managing the business, as well as doing what is in the best interest of the owners and the rest of the company. When those trusted people steal, it can be disheartening. Maybe even more troubling is the fact that so little of the proceeds of ...
This solution discusses occupational fraud and abuse.