Essay Financial Statement Fraud : A Case Of Fraud

1728 Words Oct 7th, 2014 7 Pages
Financial Statement Fraud The auditor will focus on the red alerts that have been cited to point out to the probability that there is a case of fraud in the organization. The auditor will, through the memo, make it clear to the employees that indications of fraud and the steps that will be taken in relation to citing the scam in the instances it occurred. The red flags will be clearly cited in the memo. Through the red flags, the employees will comprehend the shortcomings associated with the company operations. Fraud misrepresentation of figures in financial accounting or management of finances intended at personal gain. Fraud can also be regarded as a misrepresentation of qualities or achievements with the intention of deceiving. It is a criminal activity that may be regarded as an abuse of office. It results in significant losses for organizations and companies seek to restrict it through frequent auditing. Fraud results in a jail term for the individual implicated of the vice. Fraud is among the most costly problems in businesses. This is because often it is reported to result in losses a dollar for every dollar. Other impacts of fraud include the fact that it results in a decline in the market value of the organization in which it is reported. There are various types of fraud that each has impacts that are similar on the company. The auditor will further follow certain steps to scrutinize the operations in the company so as to cite the red flags. The first step…

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