Question

determine if corruption schemes or financial statement fraud occurs more often. discuss why you think that is the case and what can be done to prevent this from happening.

Answer 1

Corruption Schemes or Financial Statement Frauds are being reported more frequently than any time before. The current count for such schemes is much higher. Also the rate at which such schemes are increasing is alarming. More number of cases are being filed with reporting Authorities to report huge losses suffered and for recovery of fraud amount.

It is pertinent to note that such increase in corruption and fraud require to be brought down. The following steps can be taken:

a. Independent Audit : Though there are existing Audit Norms, however such Auditors shall be penalized where Fraud is reported on Financials audited by them. Audits shall be more comprehensive and shall involve certification by auditor for no fraud.

b. Fraud Investigation Committee: Powers of Fraud Investigation committee shall involve complete investigation of entity at the first signs of Fraud being reported.

c. Compulsory Whistle Blower Policy: All entities shall have whistleblower policies so as to report Frauds by employees.

d. High Penalties and Prosecution Laws for the crime doer.