The document discusses fraud, the Sarbanes-Oxley Act of 2002 (SOX), and types of fraudulent activities. It notes that fraudulent statements are associated with management fraud, and that SOX was enacted by Congress to address plummeting investor confidence through reforms like the Public Company Accounting Oversight Board to regulate auditors, increasing auditor independence, requiring audit committee independence, and new corporate disclosure requirements. It also lists and describes various types of fraudulent activities including bribery, illegal gratuities, conflict of interest, extortion, and different forms of asset misappropriation such as skimming, cash larceny, billing schemes, payroll fraud, expense reimbursement fraud, theft of cash, and theft

2. Association of certified fraud examiners

3. Fraudulent statements
Corruption
Asset misappropriation

4. Fraudulent statements are
associated with
management frauds .
Whereas all fraud involves
some forms of financial
misstatements

5. To address plummeting institutional and
individual investor confidence triggered in part
by business failures and accounting
restatements . Congress enacted SOX into law
in july 2002

6. 1.Accounting Oversight Board –
SOX created Public Company
Accounting Oversight Board
(PCAOB). The (PCAOB) is
empowered to set auditing, quality
control and ethics standards; to
inspect registered accounting firms;
to conduct investigation; and to take
disciplinary actions

7. 2.Auditors Independence – The act
addresses auditors independence by
creating more separation between a
firm’s attestation and non auditing
activities
These include 9 Functions
Bookkepping or other services
related to accounting records or
financial statements
Financial Information system design
and implementation

8. Appraisal or valuation services, fairness
opinions, contribution in-kind reports
Actuarial services
Internal audit outsourcing
Management functions or human
resource
Broker or dealer, investment adviser, or
investment banking services

9. 3.Corporate Governance and
Responsibility – the act requires all
audit committee to be independent
and requires the audit committee to
hire and oversee the external
auditors

10. 4.Issuer and Management
Disclosure – Sox imposes new
corporate disclosures requirements
including :
B. Public Companies should report
all off-balance-sheet transactions
Annual reports filed with the SEC
must include a statement by
management asserting that it is
responsible for creating and
maintaining adequate internal control

11. C. officers must certify the
company’s account “fairly present”
D. knowingly filing a false
certification is a criminal offense

12. Bribery – involves giving, offering,
soliciting or receiving things to
influence an official in the
performance of his/her lawful duties
Illegal Gratuities – this is similar to
a bribe

13. Conflict of interest – occurs when
an employee act as behalf
of third party
Economic Extortion – is the use of
threat
Asset Misappropriation - involves
third parties or employees in an
organization who abuse their
position to steal from it through
fraudulent activity. It can also be
known as insider fraud.

14. Skimming – involves stealing cash
from an organization before it is
recorded on the organization’s books
and records
Cash Larceny – cash reciepts are
stolen from an organization after
they have been recorded on the
organization’s books and records

15. Billing Scheme also known as
Vendor Fraud –are perpetrated by
employees who causes their
employer to issue a payment to a
false supplier
Payroll Fraud –is the distribution of
fraudulent paychecks to existence/or
non existence employees

16. Expense Reimbursement –are
schemes in which employee makes
a claim for reimbursement of
fictitious or inflated business
expense
Thefts of cash –are schemes that
involve the direct theft of cash on
hand in organization
Non-Cash Misappropriation –
schemes involve the theft or misuse
of organizations non- cash assets