Fraud and Internal Control
Internal control plays an important role in the prevention and detection of fraud. Under the Sarbanes-Oxley Act, companies are required to perform a fraud risk assessment and assess related controls. This typically involves identifying scenarios in which theft or loss could occur and determining if existing control procedures effectively manage the risk to an acceptable level. The risk that senior management might override important financial controls to manipulate financial reporting is also a key area of focus in fraud risk assessment.
The AICPA, IIA, and ACFE also sponsored a guide published during 2008 that includes a framework for helping organizations manage their fraud risk.
Read more about this topic: Internal Control
Famous quotes containing the words fraud, internal and/or control:
“Things gained through unjust fraud are never secure.”
—Sophocles (497–406/5 B.C.)
“I believe that there was a great age, a great epoch when man did not make war: previous to 2000 B.C. Then the self had not really become aware of itself, it had not separated itself off, the spirit was not yet born, so there was no internal conflict, and hence no permanent external conflict.”
—D.H. (David Herbert)
“He took control of me for forty-five minutes. This time I’ll have control over him for the rest of his life. If he gets out fifteen years from now, I’ll know. I’ll check on him every three months through police computers. If he makes one mistake he’s going down again. I’ll make sure. I’m his worst enemy now.”
—Elizabeth Wilson, U.S. crime victim. As quoted in People magazine, p. 88 (May 31, 1993)