Tuanakotta explained asset misappropriation and

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Tuanakotta explained asset misappropriation and corruption as follows: Asset misappropriation involves the misappropriation/theft of assets or the company’sproperties or another party. It involves third parties or employees in an organization who abuse their position. It can also be known as insider fraud. Typically, the assets stolen are cash or cash equivalents, such as credit notes or vouchers. However, the fraud can extend to include company data or intellectual property. At one end of the scale, asset misappropriation fraud may be limited to isolated cases of expense fiddling or an employee lying about his or her qualifications to get a job. At the other end, it might involve organized crime groups infiltrating organizations to take advantage of weak processes and inadequate internal systems and controls. Asset misappropriation is the most easily detected form of deception due to its tangible or measurable (exact) value. Corruption is a type of fraud that is most difficult to detect because it involves cooperation with others such as bribery and corruption, which is the most prevalent in developing countries where law enforcement is weak and lacks awareness of good governance so that the integrity factor is questionable. This type of fraud is often undetectable because the collaborating parties enjoy the benefits (symbiotic mutualism). These include abuse of authority/conflict of interest, bribery, illegal gratuities, and economic extortion. The increasing number of corporate scandals during the last century drew the attention of professionals and regulators on fraud prevention and detection analysis. Although their efforts and adoption of fraud regulations and rules, the frequency of fraud cases reported still remain high. This stability shows that fraud is a severe and continuously evolving issue, as KPMG survey reveals (KPMG, 2016)
Theory of Fraud Triangle Figure of Fraud Triangle The “fraud triangle” is one of the known concepts when it comes to fraud deterrence and detection. The theory is developed by Donald R. Cressey who is American criminologist and sociologist, famous for his extensive research into the minds of management and employee criminals (Wikipedia, 2013). As lifted from Association of Certified Fraud Examiners’ we bsite, the fraud triangle originated from Donald Cressey's hypothesis: “Trusted persons become trust violators when they conceive of themselves as having a financial problem which is non-shareable, are aware this problem can be secretly resolved by violation of the position of financial trust, and are able to apply to their own conduct in that situation verbalizations which enable them to adjust their conceptions of themselves as trusted persons with their conceptions of themselves as users of the entrusted funds or property.” The three factors that comprise the fraud triangle are opportunity, pressure, and rationalization. The opportunity to commit fraud usually implies a control environment with weak internal controls or absence of internal controls within a company. Motivation relates

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