ACC 220 Lecture Notes - Lecture 10: Internal Control, Financial Statement

• School: McKendree University
• Department: Accounting
• Course: ACC 220
• Professor: Julie Goodin

Document Summary

Fraud and accountants: employee fraud - committed by non-management employees. Employee typically circumvents internal control system for personal gain. Usually involves three steps: stealing something of value (asset, converting the asset to useable form (cash, concealing the crime to avoid detection, management fraud - committed by management employees. Often escapes detection until irreparable loss is suffered. Usually does not involve direct theft of assets. Top management may drive up the market price of company"s stock to meet investor expectations or increase value of stock options: called performance fraud. Lower-level management typically materially misstates financial data or internal reports to gain additional compensation, promotion, or escape termination. Situational pressure personal or job-related stresses that can drive an individual to act dishonestly. Opportunity direct access to assets and/or access to information that controls assets.