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What is Accounting Frauds?

Accounting fraud is a deliberate and improper manipulation of the recording of sales revenue and/or expenses in order to make a company's profit performance appear better than it actually is. Some things that companies do that can constitute fraud are:
-Not listing prepaid expenses or other incidental assets. -Not showing certain classifications of current assets and/or liabilities. -Collapsing short- and long-term debt into one amount.

Who Commits Fraud?

Various fraud report surveys reveal that the employers are the main source of accounting frauds.
There is a correlation between age, sex,education,corporate position and fraud.
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Why is it Committed ?

Preventive measures

 Recruit Employees with High Values Have Good Ethical Policies Educate the Employees

 Implement Internal Controls

-Employees duties must be separated -Companies should consider establishing an audit committee

Establish a Fraud Reporting Mechanism like

Hotline

 Instill the Fear of Being Caught. Establish an Anti-fraud Culture.

Ernst & Youngs 9th Global fraud survey: Anti-fraud policies that include the following elements will help to prevent fraud to a great extent.
i) Internal controls ii) Internal audit iii) Management reviews iv) Encouraging and protecting whistle blowers v) Regular rotation of personnel vi) External audit
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