Evaluating a strongtrendstrong analysis of fraud factors - AABRI.pdfVIP

Journal of Finance and Accountancy Evaluating a trend analysis of fraud factors Kimberly Bales University of Mary Hardin-Baylor Terry L. Fox University of Mary Hardin-Baylor ABSTRACT The Sarbanes-Oxley Act of 2002 was established primarily as an attempt to combat an increasing level of corporate fraud and to hold executives accountable. However, the level of fraud and the cost of fraud continue to increase. This paper provides a trend analysis of fraud factors in an attempt to evaluate the factors that are most prevalent so as to assist in the identification of fraudsters and the reduction of fraud occurrences. Keywords: Fraud, Fraud Trends, ACFE Survey Evaluating a trend, Page 1 Journal of Finance and Accountancy INTRODUCTION A 2003 survey by KPMG indicated that organizations are working hard to combat fraud and believe they have made great strides on the problem. It is generally understood that the key to effective fraud detection and prevention is first understanding the early signs of fraud and second, establishing effective compliance programs. Seventy-five percent of the organizations surveyed had evaluated their compliance programs within the past 12 months. These organizations also planned to implement new programs or procedures to help combat fraud and misconduct specifically as a response to the Sarbanes-Oxley Act of 2002 (SOX). As a result of these reviews, more than one-third of the organizations believed that fraud would decline in the next few years, while almost two-thirds of the organizations believed fraud levels would stay the same.