Fraud Examination in Australia - Article Example

FRAUD EXAMINATION Insert name Insert institution Introduction Thirst for money has lead to stealing in many organizations. Practice of illegally having confidential information concerning finance in any organization remains an act of fraud. This leads to interest of acquiring the finance without the knowledge of the members of the organization for personal benefit. Its occurrence can undergo enhancement by a group or an individual. Fraud practices have caused big losses to most organizations. Most investigations have gone in vain but a few remains successful. Immediate actions to stop such practices have positively contributed to fighting it. Organizations should put in place, measures to detect such practices in advance. In general, any act of benefit through deception can have description as fraud. (Angela, 2012) Types of Fraud The known types of fraud include phishing and malware. Phishing have description as a process of acquiring personal and financial information from victims that remain unsuspecting. Cyber criminals have this habit. They claim to represent different business organizations. Phishing occurs through e-mail, on phone or by texting. Computer system can undergo infection and damage without the knowledge of the owner. This has a description as malware type of fraud. Fraudsters through malware, introduces worms, viruses and spywares in people’s computer systems. In the process, they have obtained illegal information at the expense of the owner’s loss. If such infections occur in the computer systems symptoms include, slow operation, e-mail sent to strange accounts without owner’s knowledge, existence of a new tool bar among others. (Manager., 2011) Case 1 In this first case, a woman of thirty years of age stole one million and eight hundred thousand dollars. This occurred in an industry sector, involving motor vehicles repairs. She wanted to strengthen her four businesses that existed within the town where she worked. She worked as a bookkeeper and she managed to obtain that money from the organization’s bank account for six years. The owner of the business sacked most employees with the hope of realizing a change. Later on the employer resorted to a smaller premise but still debts existed. The fraud detection occurred when the name of the perpetrator, in a secret account availed. In addition, the books could not add up. The name in the secret account drained a lot of money from the business’s account according to the bankers. Recovery of the money remained a challenge. The most affected during the fraud period became the financial services sectors. To add on, during the research period, 30 of the 33 banks underwent a lot of loss in relation to this fraud. Case 2 Secondly, a male of fourty one years, motivated to gamble, stole up to twenty two point four million dollars. This also occurred in the sector of industry in a transport company. He has employment as a controller of finance as well as secretary of the company. He had the opportunity of existing as one of the signatories to the account possessed by the company. The act of the fraud occurred for a period of sixteen years extraordinarily. (Brett Warfield, 2012) Before arrest, he managed to transfer eleven million dollars and more to his accounts bought an apartment worth seventy thousand dollars. Among the situations of fraud that he conducted, three of them took ten years and this involved better part of the money stolen. Discovery of the fraud occurred when forged cheques obtainance happened. Some cheques underwent dishonouring among others activities. (Brett Warfield, 2012) Common Features Each of the employees had white-collar jobs and their positions in the organizations gave them opportunities of having knowledge concerning the companies’ finances. To add on this, both managed to steal more than five point five million dollars with the second case extraordinarily involving stealing up to twenty two point four million dollars. Both frauds took place for more than five years before detection. Such fraudsters develops lasting routines on how their act occurs, they conduct it smartly that in most companies some escape without detection. Differences in the Cases The first company involved in motor repairs the other transportation. Both of the companies experience different ranges of cash flows. In the motor repair company, smaller finances have handling compared to the transport company. This has evidence in relation to the amount each person stole. In addition, differences in gender contribute to some extent. Women have pity therefore may do it sparingly compared to men, who may not care about the owners loss. This also have evidence in both cases. Prevention It remains unrealistic to believe that fraud issues can totally have elimination within organizations. Therefore, a measure to limit the act remains the prevention. There exist some ways on how such preventions can occur and they apply to the cases above. In case the measures can undergo implementation with keenness that it requires, then minimal cases of fraud can have evidence. (Jodi, 2003) A procedure that detects fraud should be in place without the knowledge of the perpetrators. Such procedures enable the company to know the organization’s weaknesses that can undergo exploitation by the perpetrators. The company should also know how the perpetrators conceal the frauds. Very few individuals, including owners of the organization should form part of the system dealing with this procedure. The procedure also should have information relating to; first, areas within the organization that have risk of experiencing fraud. In the cases above, finance department had the risk. Secondly, the system should learn past information relating to fraud in such areas of the company. For instance, how much money underwent loss, and for how long did it occur. This needs investigation to obtain knowledge on how response should occur. Besides the procedure above, the company should conduct frequent auditing. The process should include strange auditors from outside the organization. The employees should not know when such auditing occurs. Much-qualified auditors should be involved. In case there exist any feeling of fraud in any department and evidences lack, then employees should undergo reorganization in different areas of the company. Finally, on prevention, employees should have favourable payments avoid the thirst of stealing. They should feel motivated and love their job. The employer should have concern on how to motivate the employees and encourage them. On the other hand, anyone found in issues related to fraud should undergo punishment that to the rest, it remains a lesson. Where passwords should be involved, it must be complex and kept as a top secret known by almost one individual. Fraud Motivators Different needs that push individuals into fraud have identification. Such include; addiction to drugs, busting a failing business, addiction to gambling revenge and the need of investing among others. Discussion of some of these has occurred below, where by processes of occurrence of every motivator have analysis. Drug addiction remains issues that occur almost worldwide. The individual involved remains in a consistent need due to the body demands. Therefore, money becomes the only thing needed to posses the drugs. The available sources of money may be insufficient to provide the drugs to the individual in need. Hence, one prefers engaging in an act of fraud as long as he/she can obtain money to process the drugs. Gambling occurs most frequently in public occasions where small amounts of money undergo requirements, with a promise of inning a larger amount later on. Most employees keep trying with lots of failure. By and by, they become addicted, until other negative sources of money (fraud) undergo exploitation. Such individuals have even hoped to refund after winning but this has always failed. Misunderstanding between employees and employers remains a normal issue in most organizations. In case such occurs, an employer may under take to change an employee’s position leading to reduction in the salary. Therefore, some employees due to annoyance look for means making the employer feel offended. In the process, they resort to actions of fraud after which some disappear before detection while others under detection in good time. Most employees find it fun to identify with a specific social class. Such classes have much expense beyond their earning. This include; a big nice house, a nice car, expensive cloths among others. Such lifestyles have made most employees involve in acts of fraud. Some of which have managed to succeed while others have failed due to detection. These among the others forms motivators to fraud. Detection Red flags that enhance detection of fraud practices do exist. Regrets occur after such practices have occurred, on why warnings failed to prevail. Factors that make one exploits opportunities of fraud include; low chances of catching the perpetrator, fraudster rationalizing in his mind and ability to justify the results from the rationalization. (Thomas, 1979) Red flags remains the abnormal circumstances that my affect the normal operation of the organization. It makes the company aware of a responsibility they need to take concerning a specific extraordinary situation. The organization should not ignore the red flags however little they may appear. The red flags may relate to employees, management or just the general change in behavior. In relation to employees, a drastic change in lifestyle depicts a detection of fraud. That include; expensive cars, cloths and jewelries among others. The employee may also experience problems in relation to personal credit debt. He/she may also refuse to have vacation or sick leave, and fail to accept the normal advance payment of part of salary. In case such remain evident on an employee then the organization should conduct relevant investigations to know more. Red flags related to the management can undergo obtainance incase managers remains reluctant to provide the auditors with relevant information. In cases where most decisions become available through an individual or a group, fraud actions somehow, prevails. Frequent disagreements between managers and regulatory bodies as well as disrespect to the auditors by the managers can act as an indicator. In addition, existence of missing documents of which a few that exists remain photocopies, should cause the employer to sense fraud acts. (Rowena, 2012) General change in behaviours can act as red flags. In cases where employees borrow money from co-workers, creditors coming to the place of work, excessive alcohol drinking and carrying of extraordinary large amounts of money, then these act as red flags. Therefore, employers should have the ability of immediate identification of change in the behavior of his employees. Nepotism as also acted as red flags to fraud. Individuals in higher ranks of the organization can decide to employ most of his/her relatives. The intension may exist as spreading their risk of loosing the job when caught. Other than this, stealing of any kind should lack toleration. This can occur where by an employee can be fond of just picking coins in any office without the knowledge of relevant persons. Investigation Relevant bodies such as CIDs should be involved in this. This should begin in a manner that appears not to be serious to make employees relaxed to give relevant information. The investigator should behaviour as part of the perpetrators just to assist him learns their routine and frequency of their act. In the process, before the criminal realizes the investigation act he/she undergo arrest. Different persons should be involved in investigation in different periods after a red flag appears. This makes perpetrators not to be able to notice the process. It remain preferred to spend a little bit more in investigation that to loose later on. (Representative, 2007) Conclusion In December, the year, two thousand and eleven, a fraud barometer proved that a loss of up to one billion dollars in the past four years has occurred in Australia. The general concern to every organization remains ways of preventing and fighting fraud. This remains a fact as no company has immunization to fraud. Individuals involved in fraud cases have much experience on how to conduct their routine in stealing. They mainly form part of individuals in the higher ranks of the organization. (Manager. C. , 2012) Therefore, companies should have concern in relation to who commits fraud actions and how. Continual investment in technology and research that assist in minimizing and protecting fraud actions should exist. For the cases that have undergone detection, investigations should thoroughly occur. References Angela, H. (2012). Faces of Fraud. The University of Queensland Press. Brett Warfield, P. W. (2012). Million Dollar Employees Fraud in Australia. Warfield & Associates. Jodi, P. (2003). Australian Banks Tap Carreker to Win the War Against Payment Fraud. Valley View Lane. Manager., C. (2012). Australia's Billion Dollar Fraud Bill. Finance Service Insurance Press. Manager., S. (2011). Fraud Protection Guide. Murphy & Company, Inc. Representative, E. A. (2007). Identify Smal Business Fraud.l. Costa Mesa. Rowena, J. (2012). Sentencing in Fraud Cases. New South Wales. Thomas, P. (1979). Red Flags for Fraud. New york. Read More