Accounting Irregularitie Financial Fraud -Myassignmenthelp.Com

Question: Discuss About The Accounting Irregularities Financial Fraud? Answer: Introducation On March 4th 2010, Mr. Thow pled guilty of twenty counts of fraud charges. The former investment adviser was facing the charges after bilking his clients out of millions of dollars. He persuaded his clients to invest in non existent schemes that included shares in a Jamaican Bank and an initial public offer. He also advised his clients to borrow money, mortgage their homes or liquidate their mutual investment. All these investors paid money to Thow personally (Coenen, 2008,p.56). The security regulations commission ruled that Thow was culpable of defrauding millions from hundreds of people when he was a senior vice president of Berkshire Investment Group Inc. Red flags and symptoms in a fraud That's just the flag "instability in your personal life" - that's something you never think about. It also sounds like the idea that the criminal past is far from determining a fraudster. Close attention should be paid to persons who work in the most unusual way for longer than the prescribed ones. For example people who have a weak personal moral code or who do not consider themselves obliged to comply with internal corporate and other rules ("us the law not written "). Most of all, tend to justify the act of fraud. This was also a case with Mr. Thow. In the risk group, employees who reluctantly disclose even controlled documents to managers, not to mention those who without enthusiasm share their experience with specialists to fulfill their job duties and who are not satisfied with their job, or suddenly goes on vacation. The expert in sphere of counteraction to swindle and on the following is accented. Despite the fact that "greed is greed" , the difference in the fraud of superiors who perform managerial functions in organizations is still there - the whole thing is in a new level of greed and arrogance. "Success for this category of thieves almost always comes down to financial concepts". It is impossible not to delve into the gaps in the documentation: lost or modified documents; certificate of completion of documents backdating; lack of available documents in the original; documents contradicting each other, doubtful signatures on documents. Interested persons should not leave aside the scope of remittances(Pickett, 2007). During the time of transactions, the unsettling transaction frequency, the strange sums of calculations (we pay attention to inscribing a large number of rounded numbers), an unclear counterpart. This is another red flag. For an individual it is not easy to notice a red flag unless the person you are dealing with has a past record of criminal offence. Mr. Thows clients never suspected he was a fraud. However, they would have questioned his opulent lifestyle(Young Nusbaum, 2006,p.107). Lessons Learned For a new investor , a god advise would be to thoroughly check on the investment being proposed to ascertain whether it is legit or not. Also, a new investor is supposed to look into the criminal records or past of an investment advisor together with the firm that he/she is representing. Conclusion One should pay attention to the positioning of the company in a competitive environment. Of course, given the general decline in production and the crisis in the industry, there is nothing criminal in that a single company achieves great success, but this can be evidence of a number of illegal problems (Cascarino, 2012,p.234). Moreover, to fraud can lead to bad debts and a shortage of working capital (you must also get out). Red flags of financial condition : business in an unstable sphere of the economy; high concentration of business along with a small number of consumers; rapid expansion, especially not properly planned; deterioration in the quality of profits; the company is dragged into heavy litigation; reduction in the sale of reserves, low forecasts of future sales(OGara,2004,p.56). The same and about the set of service firms and their constant change.The management should give a proper example of behavior. It is necessary to establish an adequate system for training and impr oving the skills of employees, otherwise fraud can arise as an attempt to cover up working failures caused by incompetence of personnel (Young Nusbaum, 2006). References Cascarino, R. (2012). Corporate Fraud and Internal Control + Software Demo. Hoboken: Wiley. Coenen, T. (2008). Essentials of corporate fraud. Hoboken, N.J.: John Wiley Sons. O'Gara, J. (2004). Corporate fraud. Hoboken, NJ: J. Wiley Sons. Pickett, K. (2007). Corporate fraud. Hoboken, N.J.: John Wiley Sons. Young, M., Nusbaum, J. (2006). Accounting irregularities and financial fraud. Chicago, IL: CCH.