Why are fraud and embezzlement becoming so prevalent?
They’ve always been present in the business community, but there is a greater awareness these days as a result of the national scandals like Enron and WorldCom. But today we’re more aware of it, because they are getting a lot more notoriety. These actions are no longer swept under the carpet because the carpet’s bulging; there’s no more room under it. What types of companies are most at risk? Smaller companies with fewer controls are more vulnerable. But companies with annual revenues in the multi-millions ones that you think would have adequate safeguards are victims as well. A lot of the crimes against the larger companies are the result of management overriding the established internal controls. CFOs and CEOs have almost carte blanche authority in some of those companies. Consequently, the dollar losses are greater, though statistically there are fewer instances of financial crimes discovered among larger companies. What are the most common fraud controls? Those in management have a
