diff. types of fraud in accounting

2. ACCOUNTING
M.QASIM
16-NTU-1303

3. Employee fraud
 A fraud by non management employees,is generally desighned to directly
convert cash or other assets to the employee,s personal benefits
 An employee dodge the company’s internal control system for personal gain
 usually theft assets from company
 How can it be prevented to detected ?
 an effective system of internal control
 EXAMPLE
 Loss of assets
 Sellary loss

4. Employee fraud
 If one employee handles all aspects of a transaction, the danger of
irregularities increases.

5. Management fraud
 Mnagement fraud is more dangerous then employee fraud because it often
escapes detection until the organization has suffered permanent damage or
loss.
 fraud refers to misrepresentation made by the top management of a business
to persons of employees.
 usually management fraud does not involve the direct theft of asset.

6. Management fraud
 Management fraud typically involve misslating financial statements in order
to mislead readers of those statements or to take advantage of incentives or
other benefits tied to earnings.
 Misuse of company assets
 The impact of management fraud
 EXAMPLE
 business loss
 loss of assets

7. Internal control
All measures taken by an organization for the purposes OF
 Protecting its resources against waste, fraud,or inficient use.
 Ensuring the reliability of accounting data
 securing compliance with management policies.
 evaluating the performance of all employees.

8. Guidelines to achieving strong
internal control
 Establish clear lines of responsibility
 Establish routine procedures for processing each type of transaction
 Subdivision of duties
 Rotation of employees
 Serially numbered documents
 Financial forecasts

9. Relationship between the accounting
system and internal control
 An accounting system is to provide useful financial information to decision
makers.
These two systems are closely related;in fact, each depends greatly upon the
other
 Accounting system depends upon internal control to ensure the reliability of
accounting data.Internal control explains the nature and the very existence of
many accounting records,reports,docoments,and procedures……

10. THANKS