What Are Five Elements Necessary For Commit Fraud

Introduction Elements There are five elements needed to commit fraud: (1) a false statement containing material fact, (2) the defendant possesses the knowledge that the statement is untrue, (3) the false statement’s intent is to deceive the intended victim, (4) the intended victim justifiably relies on the statement, and (5) the ending result is financial injuries to the intended victim. All false statements do not constitute for fraud; they need to contain a material fact. The materiality of the statement induces the intended victim to agree to something with the defendant. Statements of belief (puffing) are not considered fraudulent since there is no legitimate statement of fact. For example, Joe goes to buy a car and the dealer†¦show more content†¦Fraud knowledge benefits stakeholders in multiple ways. By understanding how financial statement fraud occurs, stakeholders can recognize red flags in financial statements. Outside accounting, fraud knowledge enables stakeholders to be productive members of a corporate governance. Corporate governances work as principal catalysts for stakeholders to raise corporate awareness and expectations regarding appropriate behavior and practices. Stakeholders use their fraud knowledge to contribute to the company’s Code of Conduct and Code of Ethics for management and employees as well as participate in risk mitigation efforts. Stakeholders can also participate in boards that create programs that focus on the prevention, detection, and deterrence of criminal and fraudulent acts. The goal of the programs is to ensure that everyone is making ethical decisions and reporting policies that are not followed. Maintaining corporate ethics is critical to company success (Managing the Business Risk of Fraud: A Practical Guide n.d.) Theories of Crime Causations There are three documented theories of crime causations: (1) the strain theory, (2) the control theory, and (3) the social learning theory. However, there are also biological causation of crimes which are further broken down into psychological, economic, and political theories. Understanding the sociological causes of why someone commits fraud helps fraud investigators andShow MoreRelatedFinancial Fraud, And Identification Of The Different Fraud Types1734 Words   |  7 Pagesvarious types of fraud, in order to aid understanding in regards to the prevention of fraudulent activity. This paper begins with a review of the definition of financial fraud, and identification of the different fraud types. Further, included is an examination of what motivates individuals to commit fraud, including an identification of some of the method in which people commit fraud. A discussion of the importance of the fraud triangle, and how rationalization contributes to fraud is a key areaRead M oreInternal Control and Sunshine Center1330 Words   |  6 PagesTask 3: Internal control 1. What do you think is the primary problem at the Sunshine Center? There where no financial reports or summaries of the cash flows. Probably, Barb wasn’t fare about the payments. Because there was no financial report it was not clear where all the money went to. 2. Why is accountability important to the Sunshine Center Committee? The director? Cli†¨ents of the Sunshine Center? Church members? It is so important to the committee so they can check if theRead MoreInternal Control and Sunshine Center1322 Words   |  6 PagesTask 3: Internal control 1. What do you think is the primary problem at the Sunshine Center? There where no financial reports or summaries of the cash flows. Probably, Barb wasn’t fare about the payments. Because there was no financial report it was not clear where all the money went to. 2. Why is accountability important to the Sunshine Center Committee? The director? Cli†¨ents of the Sunshine Center? Church members? It is so important to the committee so they can check if the cashRead MoreMaxwell Case Revised Essay1796 Words   |  8 Pagesare three conditions necessary for fraudulent behavior. (See Statement on Auditing Standards No. 99, Consideration of Fraud in a Financial Statement Audit. For additional explanation, you may want to review Buckhoff [2001].) a) List the three elements and discuss how each of these elements is present in Anna Thomas’ fraud at Rusher Automotive. Element of Pressure demonstrated through financial pressures, vice pressures, and work-related pressures. â€Å"The first leg of the fraud triangle represents pressureRead MoreThe New York Stock Exchange1560 Words   |  7 Pageskey personnel and to conduct a preliminary review of the company’s accounting policies, controls, and systems. During this visit, the following events occurred: a. You recognized the treasurer as a former aide to Ernie Eggers, who was convicted of fraud several years ago. â™ £ All members of an enterprise should have integrity and ethical values to be able to run a business. But, as an audit supervisor the fact the treasurer was an aid to Ernie Eggers should raise a few eyebrows. The auditor shouldRead MoreFraud As A Civil Wrong2548 Words   |  11 PagesFraud is unfortunately a subject that many companies and even people have problems controlling. Fraud is defined as deliberate deception to secure unfair or unlawful gain. It is said that fraud is both a civil wrong where a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compensation and a criminal wrong where a fraud perpetrator may be prosecuted and imprisoned by government authorities. There are many purposes of fraud that may include monetary gain or other benefitsRead MoreInternal Controls And Fraud Prevention2411 Words   |  10 PagesInternal Controls and Fraud Prevention: Overview, Analysis, and Recommendations According to the Certified Fraud Examiners’ 2012 Report to the Nations, organizations typically lose five percent of revenues to fraud annually (Laxman, Randles, Nair, 2014). Fraud impacts more than just a bottom line; it can cause significant damage to a firm’s reputation, seriously hurt investors, and degrade morale and opportunities for employees. As evidenced by recent highly publicized cases, internal controlsRead MoreCommon Types Of Criminal Defenses893 Words   |  4 PagesIn module II I learned about common types of criminal defenses. The defenses raised in a criminal case fall into two categories. The categories are, you did not commit the crime, or you committed the crime but should not be held responsible. To claim innocence, proves should be shown. For example, eyewitness testimony, documentary evidence, or a place that you were else at the time of the crime. The evidence that you committed the act are justifications and excuses. Justification admits t he act butRead MoreFraud Triangle15238 Words   |  61 Pages
  
 Chapter 2 Who Commits Fraud and Why I, Dennis Greer, am making this statement on my own, without threat or promises, as to my activities in regard to the activity of kiting between Bank A and Bank B. As of May 19XX, I was having extreme emotional and financial difficulties. For religious reasons, I was required without notice to move out of where I was living, and I had no place to go. Also, my grandmother—the only family member I was close to—was dying. I had to live Read MoreOrganizational Fraud9733 Words   |  39 PagesORGANIZATIONAL FRAUD [pic] Submitted by: Amit Goel(amigoel@gmail.com) Mohit Goel Executive Summary For many organizations, â€Å"getting it right† or â€Å"getting it wrong† is a matter of survival. This study talks about the issues like, ‘organisational fraud’, ‘ethics’ ‘empowerment’ in an organisation and their relation to standards of good behaviour in order to explore various ways in which occurrences of ever increasing frauds can be checked. Organisational Fraud can be perpetrated by those