Question

Discuss the motives of the executives to commit fraud. Discuss the culpability of the accountants in preparing the questionable accounting estimates for the cost to compete.

Answer 1

There can be numerous motives of executives to commit fraud discussed to follows:

1) Personal needs:

The personal requirements of the executive's may drive them to commit a fraud. The reason is that the executives have a lifestyle they need to uphold in the company and in the society. They will not Prefer a situation where they feel inferior to others and thus., use the opportunity accorded to them to make more money

2)The pressure on the individual

It entails to the pressure on the individuals on emanating from financial situation such as debts, as well as the shortfall regarding Me revenues, Majority of the executive see such problems as difficult to get solved via the proper methods, therefore resorting to engaging in fraudulent. activities to solve the financial challenges

3)Company requirements:

The executives are require to drive the company to success or out of difficult times. Thus there need to show the good performance, as a poor performance is an indicator of poor leadership in the firm. For its avoidance few executives will inflate scone of the results to satisfy the shareholders requirement, who may have pressured them much to produce certain results in a given time frame

4)Comparison with peers

The feel of self-worth among the executives in the company is a major motivator of the executives to commit fraud. It occurs generally when they compare themselves across their industry peers as well as how much they are receiving as a reward in their firm .This comparison generates pressure on the executive s a result., wanting to be equal with their peers commas frauds

5) opportunity factor

The opportunity factor Is natural, because executives may receive number opportunities in the company as they understand-the Internal controls and as well as The command structure of the organization

6) Ability to rationalize crime

Ability to rationalize. crime is a stage of fraud triangle calls for the executive officer to make use of their cognitive skills in order to justify their crime activities within the company their explanations tend to be convincing to the rest of the company members. That action gets seen as just normal.

7)Rational approach:

Rationalization has its own significance as again human is capable creating any kind of justification for their fraudulent activities ,thus the executives often don't consider themselves as criminals. However they think that they are taking a rational approach

The accountant plays a yawl role In the company as holds the responsibility for creating financial statements in the company, thus are legally and ethically bound. To present free and fair Waken-rents their stakeholders Accountants of the company are likely to take participants of questionable accounting account estimate through altering of Manual statements. such as adding non-existence risks to ensure that they can use the extra finances to fulfill their financial requirements Moreover it the accounting officer feel pressured to occasion the fraud in the company they have the right to whistle boll on the fraud being