“When a company has a strong internal control structure, stockholders can expect theelimination of fraud. Further management and auditors are required by Sarbanes-Oxley Act of 2002 to consider IT application controls as well as physical human controls.” (Hall, 2019, p133).
(a) Explain fraud and distinguish between employee fraud and management fraud.
(b) Using the fraud triangle theoretical framework show how fraud is committed inmultinational companies. Provide recent corporate scandal involving fraud/accounting misconduct as an example to support your answer.
(c) Critically discuss the statement that, when a company has a strong internal controlstructure, shareholders can expect elimination of fraud.
(d) In this age of high technology and computer-based information systems, why areaccountants concerned about physical (human) controls?
(25 marks for each question. 25marks X 4 = 100marks)
For an upper 2nd Class Honours (60% – 69%) mark:
Good comprehensive answer. Clear, logical, thorough with evidence of breadth and depth inreading. Understanding of inter-relationships between parts of the course and that of thesubject. A competent analytical approach is taken in the debate, and important influences are explored within the context of a balanced and well-presented discussion. There is alsorelevant referencing to appropriate authority, with the discussion containing no significant
errors and/or omissions.