Misappropriation Of Assets Essay - 1360 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†¦(Romney and Steinbart 2003) Many major corporations have suffered from the effects of fraudulent activities and Tyco Internationals situation is a perfect example of this. In order to show the impact of fraud on Tyco Interna tionals entire corporation, I will discuss the activities of the companys CEO, Dennis Kozlowski, and CFO, Mark Swartz. I will also discuss what the company is doing to prevent these happenings from occurring again. Furthermore, I will describe any provisions and current updates that intend to assist in fraud deterrence in the future. The Culprits Dennis Kozlowski became CEO of Tyco International in 1992 after working for the company for 23 years. He grew up in a Â…working-class neighborhood in Newark, New Jersey, [and] Â…attended Seton Hall [University]. (Business Week 2001) His entire history at Tyco was not always full of corruption and lies. He, at one time, was being compared to General Electric Companys CEO, Jack Welch because he transformed Tyco from an obscure manufacturer into a powerhouse worth 50 times more than when [he] took charge. (Business Week 2001) His counterpart, better yet, partner-in-crime, Mark Swartz arrived at Tyco [International] in 1991, one year before Kozlowski became CEO. (CFO 2001) After working as a due diligence consultant forShow MoreRelatedMisappropriation of Assets1400 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 discu ssion 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. 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