The Role of Internal, External and Forensic Auditors - Research Paper Example

Fraud is a complex issue since it lacks universal accord in terms of meaning and definition, unlike murder which is generally looked upon as intolerable and a matter of public law.  Fraud, on the other hand, is rather subjective.  While it is identified as a crime in one part of the world, it can be a mere matter of personal conscience and morality in other parts of the world (Page 1997, 287).  In this regard, fraud itself is deceptive because at first glance it appears to be capable of definition until one attempts to define the term (Vasiu, Warren and Mackay 2003, 971).

Ultimately fraud can be committed a number of different ways (Vasiu, Warren and Mackay 2003, 971).  The different ways that fraud can be committed provides the best method of providing a working definition.  For the purpose of this research, the relevant types of fraud are Employee Fraud/Theft of assets:  This type of fraud is typically associated with misappropriation of inventory and/or cash, skimming revenue, falsifying payroll and larceny or embezzlement (Golden, Skalak and Clayton 2006, 5).

  Theft of assets, however, is the most frequently occurring fraud (Association of Certified Fraud Examiners 2002, 6).  The most common examples of asset manipulation or misappropriation/theft are the falsified payment of bills, salaries, reimbursement of expenses, tampering with checks and schemes involving cash disbursements (Golden, Skalak and Clayton 2006, 5).  Employees can also bring third parties into the fraudulent scheme.  For instance, they can conspire with vendors to overcharge the business.

  The difficulty, however, is that employee misconduct may not always be reported or investigated as fraud, but as simple theft (Golden, Skalak and Clayton 2006, 5).