FINANCIAL STATEMENT FRAUD IN AN ORGANIZATION: ISSUES AND SOLUTIONS

FINANCIAL STATEMENT FRAUD IN AN ORGANIZATION: ISSUES AND SOLUTIONS 

CHAPTER ONEINTRODUCTION

BACKGROUND OF THE STUDY  

The web star dictionary defines fraud as “an intentional deception to cause a person to give up property or lawful right, which could also mean deceit, trickery or cheating. According to the statement of internal audit standard No2 of the Institute of Internal Auditors, USA, fraud is defined as an array of irregularities or legal acts characterized by international deception.

The world of financial statement fraud needs no introduction. The practice of manipulating the financial statements of companies to bolster their position is to act new but got to a height in Enron and world.com saga (Razace.2002).

According to the Association of Certified Fraud Examiners (ACFE), financial statement fraud is the deliberate misrepresentation of the financial condition of an enterprise accomplished through the intentional omission mount in the financial statement of organization to deceive financial statements users. It caused the accounting firm a very big embarrassment and saw the demise of the world-leading accounting firm, Author Anderson (AA) (Isaac, 2008.2). The current business environment, have pushed the top of many companies and organization with paying attention to how to make the financial statement look better in order to attract investors or paint a good picture of their companies, using aggressive accounting (Anumaka; 2007:1) Fraud is classified into two categories: *          Fraud involving the manipulation of the records and accounts *          Fraud usually by employees involving the theft, un-appropriation or embezzlement of companies funds in the form of cash or its other assets usually by junior staffs.

Apart from the problem of a scarce resource, an organization runs the typical risk of fraud and errors even more problems solution to fraud is not sought far. In this project work, problems of financial statement fraud will be extensively assessed with its solution in relation to the organization.

STATEMENT OF THE PROBLEMThe current business environment and even more economic recession, have in recent times pushed the top management of many organization into paying attention to how to make financial statements of their companies look better in order to attract investors by manipulating figures in their financial statement either by increasing or decreasing the figures depending on what they want to achieve at the moment using aggressive or creative accounting otherwise known as financial statement fraud (Anumak, 2007). In recent times, fraud has been discovered to pose a big threat to organizations. It is a big business risk that can incur a very big cost leading to a lot of problems which one of the problems is the loss of confidence of shareholders and the public in the company. This research work tries to a solution to financial statement fraud. Another area on which the research work will focus on “is auditor involvement in solving fraud problems. We will also look into corporate governance as a tool in fraud prevention cost of fraud will be discussed too. Fraud is a very big business risk which if not prevent will have a very big negative impact on organizational performance.1.3      OBJECTIVE OF THE STUDYThe major purpose of this research work is the assessment of the problems of financial statement fraud on organizations with a solution to it. Areas like reason for fraud, types and implication of costs of fraud will be discussed. Since auditors are to express their opinion on the financial statement of an enterprise as to truth and fairness of such statement, the internal auditor’s role in the prevention of fraud will be looked into. The use of corporate governance as a tool on the fraud prevention will be discussed or properly examined plus the current effort of the Nigerian Accounting Standard Board to curb fraud.

1.4      RESEARCH QUESTIONSSome research questions that have been drafted in financial statement frau in organizations: Issues and solution are as follows:

Is financial statement fraud a problem in an organization? Can I prevent fraud? How can I prevent fraud? What is the cost of fraud? Who can significantly reduce fraud in an organization? Is auditor impropriety a yardstick to fraud? Who can be held liable for fraud? Can I detect fraud? Fraud can be prevented/there is a solution to fraud?

1.5      RESEARCH HYPOTHESIS As a means of solving the problems mentioned in the research questions, the following hypothesis is formulated:ALTERNATIVE:        There is no solution to fraudNULL:       There are problems associated with fraudALTERNATIVES:      There are no problems associated with fraudNULL:       There is a solution to fraud.

1.6      SIGNIFICANCE OF THE STUDYAs the major objective of this write-up is the assessment of problems/costs of financial statement fraud on organizations with solution to it, the study will benefit various parties. One of the benefits is to the management of business organizations. It will help them to know the effect/cost of fraud, how to prevent it, even how to recognize fraud. It will also benefit investors, share-holders, financial information users, etc. who may resort to the audited financial state of organizations to take investment decisions. It will also be readily available for academic consumption.

1.7      LIMITATION OF THE STUDYThe research study was carried out under a tight schedule. It was undertaken within a short time and was carried out intermittently with lectures and private studies. There was also a problem of data collection due to reluctance on people’s side to provide information. Also, another limitation is the insincerity of some respondents in the filling of the questionnaire. For instance, some of the questionnaires were revisited through oral interviews. Financial constraint was another limitation as a student.

1.8      DEFINITION OF TERMSFraud:            An intentional deception to cause a person to give up property or some legal right, which could also mean deceit, trickery, and cheating.Financial Statement:       A yearly book that contains summarized information of the form’s affairs organized systematically.Audit:                        A person assigned to carry-out an independent examination of the evidence supporting the financial statement of an organization.Corporate governance:               A set of processes, customs, policies, laws, etc affecting the way a corporation is directed, administered, or controlled.Financial statement fraud:        The deliberate misrepresentation of the financial condition of an enterprise accomplished through the intentional misstatement of the amount in the financial statement to deceive financial statement users.  

.

Click Here To Get The Complete Project »

How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper


    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

    The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.

    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.