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Get To Know The Term Fraud In Bookkeeping

In bookkeeping, there are two types of errors, namely mistakes or errors that contain an element of accident and fraud which usually is. Fraud is a fraudulent activity carried out in such a way as to benefit oneself, groups, or other parties (individuals, companies, or institutions). Avoid fraud in accounting for your business by renting Sydney bookkeepers.

The occurrence of fraud is caused by several reasons and factors that influence it. To avoid these things, it helps you begin to learn what factors can cause it and oversee any calculation process that can cause fraud. To understand this, the following explanation explains the main factors that can cause fraud.

Drivers of Fraud
The several factors that encourage a person to commit fraud or fraud in corporate financial reporting are:

General Factors
It is a factor related to the organization as a victim of fraud. These factors include:

Opportunity
The opportunity to commit fraud depends on the position of the perpetrators of the object of fraud. Generally, the management of an organization or company has greater potential for cheating than employees. However, it should be underlined that the opportunity to commit fraud will always be at every level of the position.

Exposure
The disclosure of fraud in an organization or company does not guarantee that the fraud will not be repeated, both by the same actors and others. Therefore, every perpetrator of fraud should be subject to sanctions if his actions are revealed.

Individual Factor
This factor is related to individuals as perpetrators of fraud consisting of:

Greed
Greed is related to individual morals. View of life and the environment play a role in the formation of one’s morals.

Need
Associated with the views/thoughts and needs of employees or officials associated with assets owned by the company, agency, or organization where he works. Besides, the pressure faced in working can cause honest people to have motives for cheating.

The types of fraud that can occur are divided into several reasons such as the following:

Based on the Cheater
• Employee fraud or employee fraud is fraud committed by employees in a work organization.

• Management fraud or fraud management is fraud committed by management by using financial reports or financial transactions as a means of fraud, usually done to cheat stakeholders or stakeholders associated with the organization.
Based on Fraudulent Actions

• Misappropriation of assets or misappropriation of assets), is the intentional misuse of company assets for personal gain, usually done by employees such as cash embezzlement, use of facilities for personal gain, and so on

• Fraud in financial statements or fraudulent financial reporting is a misstatement or omission of intentional amounts and disclosures to deceive users of the report, usually often done by management.

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