ACG 2021 Lecture Notes - Lecture 4: Regal Entertainment Group, Arthur Andersen, Internal Control
15 Dec 2017
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Document Summary
Occupational fraud: the use of one"s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization"s resources. Ex: regal entertainment group, 7% of total revenues. These represent a company"s plan to (1) safeguard the company"s assets and (2) improve the accuracy and reliability of accounting information. Reports that theft or the misuse of the company"s resources occurs in 90% of all fraud cases. Common examples include stealing cash or inventory or using the company"s resources for non- work related purposes. Strong internal controls help to minimize financial statement manipulation. Managers are entrusted with the resources of both the company"s lenders (liabilities) and its owners (stockholders" equity) Two of the highest-profile cases of fraud in the u. s. : Enron and worldcom (both companies had the same audit firm arthur andersen) Sarbanes-oxley act: public company accounting reform and investor protection act of 2002 (sox)
