BUS 214 Chapter Notes - Chapter 4: Accounts Receivable, Malware, E-Commerce
Document Summary
Fraud is an intentional misrepresentation of facts, made for the purpose of persuading another party to act in a way that causes injury or damage to that party. 2 most common types of fraud that impact financial statements: This type of fraud is committed by employees of an entity who steal money from the company and cover it up through erroneous/incorrect entries in the books. This type of fraud is committed by company managers who make false and misleading entries in the books, making financial results of the company appear to be better than they actually are. Both include making false/misleading entries in the books of a company = cooking the books. The fraud triangle explains in graphic form the elements that make up virtually every fraud. Motive results from either critical financial need or greed. Ie improper segregation of duties and/or improper access to assets; weak control environment.
