Evelyn Benavidez

ACCT-2600-404 (e-Portfolio Signature Assignment)

Professor David Alldredge

19 February 2020

e-Portfolio Signature Assignment

Corporate fraud is an issue that several organizations have faced. Pressure, rationalization

or opportunity could be some of the factors which encourage employees to commit this type of

unscrupulous act. According to a research performed by the Association of Certified Fraud

Examiners, an organization loses about five percentage of its annual revenue every year due to

employee fraud (Rosten). Fraud has a substantial impact on any business, no matter what kind or

how small or big it is. The basic types of fraud have to do with misappropriation of assets “where

individuals treat the company assets like cash as their own assets” and fraudulent financial

reporting “when a company knowingly reports false information to investors and creditors.”

(Alldredge). Analyzing the example provided of Bernie Madoff, who operated the largest private

Ponzi scheme, made me question whether the lack of moral ethics at work should be something

we should really worry about. Today’s world has developed a different definition about money,

and this is because money dominates our daily thoughts. According to the book The DNA od

Success, pleasant or disturbing could be the thoughts regarding money and the desire to own and

increase it could make people to act without scruple (Zufelt). People as Mr. Madoff are willing to

do whatever it takes to generate profit, the lack of awareness of what could be the consequences

or the damage that could be caused. Assuming that a company finds out that an employee

committed fraud, he will have to face several legal penalties, potential benefit disqualification,

monetary penalties and even potential jail time. The company will also be affected by facing an
ongoing problem of people’s trust, financial loss, unfavorable reputation and even an increasing

of audit cost. Although there are several things for which money is required such as to support

ourselves, to get an education, to help others or even to donate, it should not be an option to

commit fraud because it could lead to a negative outcome as much as for the one who committed

the fraud and the company in which the fraud was committed.
 Reference

Rosten, Mike. “Global Fraud Report Shows Organizations Lose 5% Annual Revenue to Fraud.”

Piercy Bowler Taylor & Kern, Piercy Bowler Taylor & Kern, 25 May 2018,

www.pbtk.com/global-fraud-report/.

Alldredge, David, Neeley, Tammie, and Gunn, Wendy, “Introduction to Ethics in Financial

Reporting.”

Zufelt, Jack M. “The DNA of Success: Know What You Want to Get What You Want,” 1st ed.,

Regan Books, 2002, 129-30.