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:
“He saw, he wish’d, and to the prize aspir’d.
Resolv’d to win, he meditates the way,
By force to ravish, or by fraud betray;
For when success a lover’s toil attends,
Few ask, if fraud or force attain’d his ends.”
—Alexander Pope (1688–1744)
“We all run on two clocks. One is the outside clock, which ticks away our decades and brings us ceaselessly to the dry season. The other is the inside clock, where you are your own timekeeper and determine your own chronology, your own internal weather and your own rate of living. Sometimes the inner clock runs itself out long before the outer one, and you see a dead man going through the motions of living.”
—Max Lerner (b. 1902)
“The three-year-old who lies about taking a cookie isn’t really a “liar” after all. He simply can’t control his impulses. He then convinces himself of a new truth and, eager for your approval, reports the version that he knows will make you happy.”
—Cathy Rindner Tempelsman (20th century)