Organizational Fraud

Essay by ami_goel August 2009

download word file, 36 pages 0.0

Downloaded 213 times

Executive SummaryFor many organizations, "getting it right" or "getting it wrong" is a matter of survival. This study talks about the issues like, 'organisational fraud', 'ethics' & 'empowerment' in an organisation and their relation to standards of good behaviour in order to explore various ways in which occurrences of ever increasing frauds can be checked. Organisational Fraud can be perpetrated by those outside an organization ("third parties"), by employees, or through the collusion of employees and third parties. Numerous surveys in recent years have reported that the majority of fraudsters are employees, with more than half of these being from management grades.

With just one fraud Blue Chips turns into potato chips!!!!!While saluting the rags to riches (and now riches to rags?) stories of organizations, we must also remember that for a Public Ltd Co., the stakeholders interests are foremost, not just shareholders. There must be more transparency between the management and employees and also the clients and the general public.

Something of this sort happened with Enron and its Auditing firm "Arthur Anderson", now Accenture. They used to say ' you can teach Accountancy to an honest person but not honesty to an (dishonest) Accountant'.

"You can fool some of the people all the time; All the people for some of the time but not all the people all the time " - how true!!!!!Table of Contents1. INTRODUCTION72. OBJECTIVES OF STUDY83. DEFINING FRAUD83.1 Types of fraud83.2 Legal Elements of Fraud93.3 How big is the problem?103.4 Who are the perpetrators?103.5 Why do people commit organizational fraud?113.5.1Motivation113.5.2Opportunity113.5.3Rationalization113.6 Red Flags of Organizational Frauds113.6.1. Structural red flags113.6.2. Personnel red flags123.6.3. Operational red flags123.6.4. Accounting system red flags123.6.5. Financial performance red flags124. ESSENTIALS OF ORGANIZATIONAL FRAUD124.1Detection135. SATYAM SCANDAL145.1 Lessons for HR Professionals145.2 Lessons for India Companies156. ORGANISATIONAL EMPOWERMENT167. RISK OF FRAUD IS LESSENED IN...