ACCOUNTING FRAUD

PRESENTED BY
LEYDI JOHANA DEL C ESCOBAR

CORPORACIÓN UNIVERSITARIA AMERICANA

PUBLIC ACCOUNTING
ENGLISH VI
TEACHER. JUAN JOSUÉ FONTALVO AVILEZ
MEDELLÍN, ANTIOQUIA.
FEBRERO 2023
 FRAUD

What is accounting fraud?

It consists of the erroneous presentation of a company's accounting due to deliberate

alterations of the figures or the unintentional delivery of inaccurate information that may

result from mistakes in manual processes. In addition to legal penalties, such fraud damages

reputation and financial stability, becoming a latent threat to any organization.

Some recurring examples of accounting fraud are: sales and services not declared in taxes,

payroll payments to non-existent workers, loss or duplication of invoices and accounting

documents, and false decreases or increases in inventories. In fact, 82% of the managers of

multinationals around the world recognize that their organizations have been significantly

affected by illegal activities, fraud, corruption, among others.

Although there are practices to prevent this problem from professional ethics and the

management of permits and licenses, the use of technological resources is nowadays essential

for the verification of invoices, financial statements and other accounting records.

How to stop it?

1. Train employees: employees: in addition to knowing and accepting the organization's

anti-fraud policies and code of ethics, must know how to proceed when they identify an

irregular situation. It is important that they are aware of the red flags and reporting

mechanisms, including anonymous reporting.

2. Automate the legalization of expenses: The formalization of the electronic invoicing

process, the new procedures with RADIAN and the issuance of the Support Document have

been key factors for companies to seek a reorganization of the expense processes in their
companies. Companies have had to adapt to the new digital environment that promises to

lead the country to greater fiscal control and greater tax collection. These changes have led

technology companies to rebound in recent months, managing to provide solutions that

facilitate this transition in an increasingly digital tax environment.

In this way, given the difficulties that companies will face for their legalization of

expenses, such as the delay in the approval process, the complications in reading the

endorsements received and the inconveniences to show the information before the audits.

3. Audit periodic management reports: Frequently audit reports of costs, expenses and

income for specific periods to reduce fraud risks.

4. Validate duplicate expenses or invoices: on average, between 2% and 4% of a

company's expenses are duplicates and it is practically impossible to identify them manually.

With a complete accounting system, all information can be validated.

https://www.portafolio.co/negocios/empresas/que-es-el-fraude-contable-y-como-
prevenirlo-en-las-empresas-571241
https://actualicese.com/legalizaciones-de-gastos-100-digital/
https://www.esan.edu.pe/conexion-esan/como-realizar-una-auditoria-interna-de-
gestion-de-calidad-de-manera-efectiva