Question

Using managerial concepts from courses like Statistics and MIS where applicable, take a comprehensive look at the impact of the Fraud and Abuse Pre-Employment Screening Policy outcomes and discuss the impact at each applicable level.

Note: the class is actually Human Resource management. Thank you

Answer 1

There are many ways that employees can commit fraud. Although it can go by many different names, such as employee dishonesty, occupational fraud, and internal fraud, it amounts to the same thing: “the multifarious means which human ingenuity can devise, which are resorted to by one individual, to get an advantage over another by false representations” (Albrecht, Albrecht, Albrecht, &Zimbelman, 2016). There are three basic types of fraud against organizations: (1) asset misappropriation - a scheme that involves the theft or misuse of an organization’s assets, (2) corruption - a scheme in which a person uses his or her influence in a business transaction to obtain an unauthorized benefit contrary to that person’s duty to his or her employer, and (3) fraudulent statements - fabrication of an organization’s financial statements to make the company appear more or less profitable (Albrecht et al, 2016).

Asset misappropriation is perhaps the most prevalent of organizational fraud. Asset misappropriations can be divided into two major categories: (1) thefts of cash and (2) thefts of inventory and other assets. The theft of cash can be subdivided into three subgroups: (1) larceny (intentionally taking away an employer’s cash without the consent and against the will of the employer), (2) skimming (the removal of cash from a victim entity prior to its entry in an accounting system), and (3) fraudulent disbursements. Likewise, theft of inventory and other assets can also be subdivided into two groups: (1) misuse and (2) larceny (Albrecht et al, 2016).

Corruption is the second major type of occupational fraud committed against organizations. Corruption can be broken down into the following four groups: (1) bribery schemes, (2) conflict of interest schemes, (3) economic extortion schemes, and (4) illegal gratuity schemes. Bribery is a scheme in which a person offers, gives, receives, or solicits something of value for the purpose of influencing a business decision without consent. A conflict of interest is when an employee, a manager, or an executive has an undisclosed economic or personal interest in a transaction that adversely affects the company. Economic extortion is the coercion of another to enter into a transaction based on wrongful use of force, fear, or economic duress. Lastly, Illegal gratuities is a scheme in which a person offers, gives, receives, or solicits something of value because of an official act or business decision without the knowledge or consent of the principal (Albrecht et al, 2016).

Of the three basic types of fraud, fraudulent financial statements is perhaps the least prevalent. Fraudulent financial statement fraud is when financial statements are prepared in ways that intentionally misstate the financial position and performance of an organization. Such misstatements can result from manipulating, falsifying, or altering records. Misleading financial statements can cause serious problems in the economy. They often result in large losses for investors, lack of trust in the market, and litigation and embarrassment for individuals and organizations (Albrecht et al, 2016).

Each of us pays not only a portion of the fraud bill but also for the detection and investigation of fraud, because fraud affects how much we pay for goods and services. It is almost impossible to read a newspaper or business magazine without coming across multiple incidents of fraud (Albrecht et al, 2016).

References

Albrecht, W. S., Albrecht, C. O., Albrecht, C. C., &Zimbelman, M. F. (2016). Fraud Examination (5th ed.). Retrieved from The University of Phoenix eBook Collection.