Accounting Fraud in Western Corporations - Factors and Impacts during the early 21st century

Corporate governance commands the ultimate way any corporation acts. Corporations are now more involved in accounting fraud. This is however no longer an uncommon crime in today’s world but when this fraud is committed by top leadership management it can go down in history as some of the greatest corporate scandals. Over the years after the millennium, the increase of high-profile accounting scandals has emerged within our eyes. The impact of reporting inaccurate financials cannot be over emphasized. There are series of consequences that arise from an inappropriate financial reporting from any corporation. 

A case study on major culprits to this crime will show how deep this premeditated offense can go and how well-orchestrated the fraudulent activity is achieved. These are such huge wrongdoing that it involves more than one person. The idea of having the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and top Directors in the corporation participate is alarming. In some cases, the auditors play an essential role in the coverup of this misconduct. The price to pay is so costly as convicted persons face prison sentences not to talk all their assets and money disappeared. Standards have now been raised in terms of auditing. Financial servicing organisation had modified their audit approach and procedure to enable the firms detect fraudulent activities. This has enabled stakeholders and shareholders to rely more on audited financial statements in making strategic decisions. 

Also, the vetting and appointment of board of directors have been strengthen to assure the right person is appointed. Getting the right person cannot just be enough, effective internal controls need to be put in place to mitigate audit and fraud risk. Many corporations now have internal auditing teams to avoid these occurrences. This study further ends with the recommendations on resolutions of these crimes as the repercussions are stiff and detrimental.