Misappropriation of Assets - 1400 Words

Introduction Over the past two years, corporate America has endured a plethora of fraudulent acts committed by those of high status within their respective corporations, most of which involve internal fraud. Internal fraud has two main aspects, misappropriation of assets and fraudulent financial reporting, with the focus of this discussion lying within the former. Misappropriation of assets is defined as fraud for personal gain. It is the most common type of fraud found among employees and frequently includes theft of cash and inventory. Misappropriation of asserts, better yet, fraud in general, is relevant to and pivotal for accountants, auditors, and people in business for the simple fact that the losses from fraud affects the†¦show more content†¦Swartz borrowed approximately $33,097,925. (Sri Media 2002) This falls under the category of misappropriation of assets because these funds were taken form the company and it violates the separate economic entity principle f or accounting purposes. Monies were borrowed form the company for personal use and gain which is misappropriation of the firm s assets. Swartz borrowed millions in non-program loans to purchase, develop and speculate in real estate; to fund investments in various business ventures and ownership of Tyco stock. (Sri Media 2002) Kozlowski also caused a Tyco subsidiary to purchase property in Rye, New Hampshire from [him] on July 6, 2000 for $4,500,000. After an appraisal in March 2002 valued the property at $1,500,000, Tyco wrote down the carrying value of the property to the appraised value and charged [him] $3,049,576 overpayment to expense. [He] also used millions of dollars of company funds to pay for his other personal interests and activities, including a $700,000 investment in the film Endurance; more than $1 millionShow MoreRelatedMisappropriation Of Assets Essay1360 Words   |  6 Pagescorporations, most of which involve internal fraud. Internal fraud has two main aspects, misappropriation of assets and fraudulent financial reporting, with the focus of this discussion lying within the former. Misappropriation of assets is defined as fraud for personal gain. It is the most common type of fraud found among employees and frequently includes theft of cash and inventory. Misappropriation of asserts, better yet, fraud in general, is relevant to and pivotal for accountants, auditorsRead MoreOccupational Fraud : A Glance At Asset Misappropriation And Other Types Of Organisational Fraud Essay1074 Words   |  5 Pages II. 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Misappropriation of assets The likelihood that the control environment will prevent misstatements arising from misappropriation of assets is low. Dickon Technologies has controls in place to prevent misappropriation of assets; however, many of these controls are not properly implemented. Management concluded that staffing is currently at an adequate level inRead MoreEssay Audit Engagement993 Words   |  4 Pageswould prevent misstatements arising from misappropriation of assets and fraudulent financial reporting. nbsp;nbsp;nbsp;nbsp;nbsp;The controller, CFO, and CEO review all financial reports before releasing them. Another area to consider was the assignment of authority and responsibility. Because three different people review the financial reports, it’s easier to identify any mistakes that may have been made which in turn reduces the chances of misappropriation in fraudulent reporting. Through conversationRead MoreDickinson Technologies Essays1577 Words   |  7 Pagessupervisors and on tope of that the senior management does not exercise significant oversight on such decisions and activities. 3. The controls related to safeguarding the assets: Section 3, under topic Management’s Philosophy and Operating Style, of the questionnaire suggests that control system to protect valuable assets exists, but, number of examples of failure to adhere to the system or lack of appropriate management oversight were observed. 4. The segregation of duties, particularly in keyRead MoreFraud : Fraud And Fraud1551 Words   |  7 Pagesfraud, an auditor must be able to differentiate between what is considered fraud and what is considered error. 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