Internal Controls

Fraud Triagle The most burning(prenominal) element of the subterfuge triplicity is opportunity. For an employee to commit takeoff, the workplace surroundings must provide opportunities that an employee yap exploit. Opportunities occur when the workplace lacks ample ascendances to deter and detect juke. For example, lamentable monitoring of employee actions domiciliate gain opportunities for theft and can trigger off employees because they believe they will not be caught A theatrical role doer that contributes to dupery is financial pressure. Employees sometimes commit fraud because of personal financial problems caused by too much debt. Or they might commit fraud because they fatality to lead a lifestyle that they cannot afford on their current salary. The third agent that contributes to fraud is rationalization. In distinguish to justify their fraud, employees rationalize their thievish actions. For example, employees sometimes justify fraud because they believe they ar underpaid slur the employer is making lots of money. These employees sense of smell justified in dislocate because they believe they deserve to be paid more. SOX ACT What can be done to prevent or to detect fraud? by and by numerous incorporated scandals came to light in the azoic 2000s, coitus addressed this come in by passing the Sarbanes-Oxley performance of 2002 (SOX).

infra SOX, all publically traded U.S. corporations atomic number 18 required to maintain an dependant system of internal watch. corporeal executives and boards of directors must ensure that these controls be reliable and effective. In addition, sovereign outside auditors must enter to the adequacy of the internal control system. Companies that fail to comply argon subject to fines, and company officers can be imprisoned. SOX also created the creation Company Accounting precaution Board (PCAOB) to establish auditing standards and block auditor activity. Internal control consists of all the related methods and measures deplumate out within an geological formation to safeguard its assets, enhance the reliability...If you want to choose a extensive essay, order it on our website: Orderessay

If you want to get a full information about our service, visit our page: How it works.