AIM Corporation: A Business Fraud Case Study

2018 ◽  
Vol 3 (1) ◽  
pp. A37-A51
Author(s):  
Thomas R. Weirich ◽  
Natalie Tatiana Churyk
Keyword(s):  
Graduate Students ◽  
Case Studies ◽  
Internal Control ◽  
Fraud Triangle ◽  
Occupational Fraud ◽  
Asset Misappropriation ◽  
Internal Control Weaknesses

ABSTRACT The Association of Certified Fraud Examiners (2016) indicates that asset misappropriation is the most common form of occupational fraud. Based upon a real company, this case contains six frauds: collusions, commissions, fictitious sales, rebates, refunds, and write-offs. It also includes several asset misappropriation (e.g., theft of cash, misuse of inventory, and fraudulent reimbursement) schemes. Furthermore, four of the six frauds are not found in other published case studies. The case seeks to enhance learning by having students (1) examine multiple fraudulent schemes within a single company, (2) identify frauds after examining firm procedures and documents, (3) suggest applicable fraud protection procedures, (4) identify internal control weaknesses, and (5) apply the fraud triangle. Undergraduate and graduate students from two universities performed well on the case.

scholarly journals Integrating Religiosity into Fraud Triangle Theory: Findings on Malaysian Police Officers

2019 ◽  
Author(s):  
Jamaliah Said ◽  
Md. Mahmudul Alam ◽  
Zulyanti Abdul Karim ◽  
Razana Juhaida Johari
Keyword(s):  
Police Officers ◽  
Police Department ◽  
Primary Data ◽  
Lower Probability ◽  
Fraud Triangle ◽  
Cross Sectional ◽  
Occupational Fraud ◽  
Asset Misappropriation ◽  
Triangle Theory ◽  
Sabah And Sarawak

Purpose – This study aims to conduct an empirical analysis of the factors that determine the occupational fraud behaviour.Design/methodology/approach – This study utilizes primary data collected by a questionnaire based survey on 186 police officials of Malaysia including Sabah and Sarawak. Data is analysed using descriptive statistics, factor analysis, and cross-sectional regression.Findings - The results derived in the study showed a statistically significant positive relationship between three basic variables of the fraud theory – pressure, opportunity, and rationalization with asset misappropriation. Moreover, this study revealed that religiosity is statistically significantly and negatively correlated to asset misappropriation. Therefore, the higher religiosity of an individual correlates with the lower probability involve in asset misappropriation.Practical implications - The findings will help Anti-Corruption Commission, Enforcement Agency of Integrity Commission, Police Department, and relevant agencies from Malaysia and other countries to design policies for reducing cases of fraudulent behaviour.Originality/value – This study is an original work based on the primary data collection.

Analisis Faktor-Faktor Penyebab Fraud Pada Badan Usaha Milik Daerah

2016 ◽  
Vol 3 (2) ◽  
pp. 97-119
Author(s):  
Muhamad Erfin Fatoni ◽  
Abdul Halim
Keyword(s):  
Human Resources ◽  
Control Systems ◽  
Internal Control ◽  
Secondary Data ◽  
Qualitative Approach ◽  
Primary Data ◽  
Fraud Triangle ◽  
Fraud Prevention ◽  
Internal Control System

The purpose of this research is to analyze the factors that cause the occurrence of fraud in PD BPR Bank Dearah X which is one of the regional owned enterprises of Local Government X and identify the steps ways of fraud prevention which is effective in PD BPR Bank Daerah X. This research uses a qualitative approach with a case study. This study uses the primary data and secondary data. This research uses many data collection techniques by conducting an interview, an observation and a documentation. The results show that the factors that cause the occurrence of fraud in PD BPR Bank Daerah X can be classified into four, namely: (1) the pressure that comes from the external and internal influence, (2) an opportunity or a chance due to the weakness of internal control systems owned by BPR , sanctions are not strict enough for the wrongdoers of fraud, and misuse of authority committed by directors, (3) rationalization, and (4) collusion. The ways of fraud prevention which are done by the management of PD BPR Bank Daerah X and based on the results of interviews conducted by the researchers, can be identified as follows: (1) An improvement of the internal control system in PD BPR Bank Daerah X, (2) An implementation of policy of know your employee (KYE) as an effort of fraud prevention by controlling the aspects of human resources (HR); (3) A creation of a special line of fraud reporting policy;and (4) An establishment of policies and sanction procedures. Keywords: Fraud, Regional Owned Enterprises, Fraud Triangle, Anti-fraud Strategy.

Sunshine Center: An Instructional Case Evaluating Internal Controls in a Small Organization

2010 ◽  
Vol 25 (4) ◽  
pp. 709-720 ◽  
Author(s):  
Sandra K. Fleak ◽  
Keith E. Harrison ◽  
Laurie A. Turner
Keyword(s):  
Child Care ◽  
Financial Reporting ◽  
Internal Control ◽  
Care Center ◽  
Internal Controls ◽  
Fraud Triangle ◽  
For Profit ◽  
Not For Profit ◽  
Control Framework ◽  
Internal Control Weaknesses

ABSTRACT: Management and auditors face increased responsibilities to evaluate internal control and assess the risk of fraud. This case provides the opportunity to evaluate internal controls and the possibility of fraud in a very small not-for-profit child care center, a setting that is easy to understand. The first goal of the case is to identify internal control weaknesses by applying the COSO internal control framework in an environment that lacks many aspects of internal control. Interactions among the five components of the COSO framework provide the basis for analyzing internal control. The case requires students to consider possible misappropriation of funds using the fraud triangle. A secondary goal of the case is to introduce financial reporting for a not-for-profit organization as a means of accountability.

scholarly journals Strategies to Prevent and Detect Occupational Fraud in Small Retail Businesses

2020 ◽  
Vol 19 (1) ◽  
Author(s):  
Marquita V Davis ◽  
David Harris
Keyword(s):  
Internal Control ◽  
Control Strategies ◽  
Wealth Distribution ◽  
Business Owners ◽  
Small Business Owners ◽  
Economic Stability ◽  
Positive Effects ◽  
Occupational Fraud ◽  
Multiple Case

The objective of this multiple case study was to explore internal control strategies owners of small retail businesses in southeastern Pennsylvania used to prevent and detect occupational fraud. The results of this study indicated that there are areas for action that owners of small retail businesses could take to prevent and detect occupational fraud. Strategies business owners could implement to protect their businesses from occupational fraud include monitoring, employee identity documents to track employee activity, separation of duties, and communication with employees. Small business owners serve their communities by focusing on wealth distribution, including donations to local charities that foster economic stability with positive effects on society.

Internal controls and fraud – empirical evidence from oil and gas company

2016 ◽  
Vol 23 (4) ◽  
pp. 1154-1168 ◽  
Author(s):  
Khairul Mizan Zakaria ◽  
Anuar Nawawi ◽  
Ahmad Saiful Azlin Puteh Salin
Keyword(s):  
Internal Control ◽  
Oil And Gas ◽  
Direct Access ◽  
Fraud Triangle ◽  
Contributing Factors ◽  
Academic Journal ◽  
Content Type ◽  
Study Approach ◽  
Internal Control Weaknesses ◽  
Triangle Theory

Purpose The purpose of this study is to examine the type of internal control weaknesses and its impact that leads to fraud activities in an oil and gas company, which is rarely found in empirical research. Design/methodology/approach A case study approach was taken to investigate and analyse the fraud incidents to the deepest understanding. A mixed method of data collection, specifically document analysis and interviews, was used. Findings The study found that internal control weaknesses can be major contributing factors for fraud to be committed. Poor supervision and improper documentation process provide opportunity to misappropriate the assets, worst off if it includes several people that cooperate to conduct those illegal malpractices. Research limitations/implications The results provide further confirmation of the fraud triangle theory on the causes of the fraud, i.e. opportunity because of weak internal control. It also validates with many prior studies conducted by global professional firms such as KPMG, PricewaterhouseCoopers and Association of Certified Fraud Examiners on fraud and its related causes and implications. This study, however, was conducted on only one company with limited number of interviews. Practical implications This study provides some recommendations to improve weak internal control, which in turn will reduce opportunities of fraud committed in the company. Originality/value This study is original, as it focuses on a company that operates in the highly specialized industry, i.e. oil and gas, which is rare in fraud literature, particularly in developing markets such as Malaysia. It has examined various documents and reports of employee fraud that are generally difficult to be accessed by researchers to be finally published in an academic journal. The findings of this study are inferred from direct access of company documents that are private and confidential.

scholarly journals Integrating religiosity into fraud triangle theory: findings on Malaysian police officers

2018 ◽  
Vol 4 (2) ◽  
pp. 111-123 ◽  
Author(s):  
Jamaliah Said ◽  
Md. Mahmudul Alam ◽  
Zulyanti Abdul Karim ◽  
Razana Juhaida Johari
Keyword(s):  
Police Officers ◽  
Police Department ◽  
Primary Data ◽  
Lower Probability ◽  
Fraud Triangle ◽  
Cross Sectional ◽  
Content Type ◽  
Occupational Fraud ◽  
Asset Misappropriation ◽  
Triangle Theory

Purpose The purpose of this paper is to conduct an empirical analysis of the factors that determine the occupational fraud behavior. Design/methodology/approach This study utilizes primary data collected by a questionnaire-based survey on 186 police officials of Malaysia including Sabah and Sarawak. Data are analyzed using descriptive statistics, factor analysis, and cross-sectional regression. Findings The results derived in the study showed a statistically significant positive relationship between three basic variables of the fraud theory – pressure, opportunity, and rationalization with asset misappropriation. Moreover, this study revealed that religiosity is statistically significantly and negatively correlated to asset misappropriation. Therefore, the higher religiosity of an individual correlates with the lower probability involve in asset misappropriation. Practical implications The findings will help Anti-Corruption Commission, Enforcement Agency of Integrity Commission, Police Department, and relevant agencies from Malaysia and other countries to design policies for reducing cases of fraudulent behavior. Originality/value This study is an original work based on the primary data collection.

A Segregation of Duties Case Study in the Purchase-to-Pay Process with an SAP Example

2007 ◽  
Vol 2 (1) ◽  
pp. 1-21 ◽  
Author(s):  
Nancy Jones ◽  
Jim Mensching
Keyword(s):  
Internal Control ◽  
Information Assurance ◽  
Business Environment ◽  
Theoretical Base ◽  
Financial Responsibility ◽  
Erp System ◽  
Reporting Requirements ◽  
Sarbanes Oxley ◽  
Internal Control Weaknesses

Abstract With the advent of legislation dealing with financial responsibility and information assurance, the topic of segregation of duties has gained additional importance. Recent studies have found that segregation of duties is one of the areas in which companies have frequently disclosed material internal control weaknesses under reporting requirements of the Sarbanes-Oxley Act of 2002. This is a case assignment that develops both the theoretical base for segregation of duties and then illustrates how this is accomplished in a highly integrated computerized enterprise business environment. The authorization system within the SAP R/3 system is used to illustrate the implementation of segregated duties in one type of ERP system. There are four steps to the case: assessing risks of the business process, defining positions within the organization to handle a set of defined tasks, developing an authorization matrix for designated employees, and examining the SAP authorizations system.

Internal control and employees’ occupational fraud on expenditure claims

2018 ◽  
Vol 25 (3) ◽  
pp. 891-906 ◽  
Author(s):  
Anuar Nawawi ◽  
Ahmad Saiful Azlin Puteh Salin
Keyword(s):  
Internal Control ◽  
Working Environment ◽  
Fraud Triangle ◽  
Content Type ◽  
Study Approach ◽  
Occupational Fraud ◽  
Financial Pressure ◽  
Culture Influence ◽  
Employees Satisfaction ◽  
Triangle Theory

Purpose The purpose of this study is to investigate the weaknesses of internal control in expenditure claim procedure and to identify the opinions of employees regarding an occupational fraud. This study also attempts to examine the most popular occupational fraud committed by the employee and whether a company’s working environment contributed to the fraud. Design/methodology/approach A case study approach was adopted to investigate and analyse the weaknesses of the internal control and occupational fraud incidents. A mixed method of data collection, specifically, survey questionnaire and document analysis were used. Findings This study found that the internal control of the expenditure claim procedure was weak and needed improvement. This study also found that a strong internal control and a better remuneration paid to the employees could reduce the risk of the occupational fraud committed in the company. In terms of fraud types, this study discovered that claims on mileage, followed by petrol, accommodation and suppliers’ invoice were the most popular occupational frauds committed by the employees. Finally, employee dissatisfaction and poor working-environment culture influence occupational fraud’s level in the organizations. Research limitations/implications The results provide further confirmation of the fraud triangle theory on the causes of fraud, i.e. opportunity because of a weak internal control and financial pressure because of low and non-standardized salary. This study, however, was conducted only on one company. Practical implications This study provides some recommendations to overcome the weak internal control and improve employees’ satisfaction which lead to better working environment. Thus, opportunities for fraud in the company can be reduced. Originality/value This study is original, as it focusses specifically on occupational fraud which is rare in fraud literature, particularly for a study that is conducted in developing markets like Malaysia. It also has examined various related sensitive documents and reports of employee frauds that are generally difficult to be accessed by researchers.

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