How to protect Companies against accounting frauds ?

Rotate your auditors in regular intervals.

allow peer review or parallel audit.

Ensure proper accounting system and controls are in place and are properly monitored. The segregation of duties would prevent collusion and embezzlement to occur. Mistakes can also cost an organization substantial amounts if the errors are not identified in a timely manner.

Internal and external auditors cannot prevent frauds from occuring in any organisation.

Fraud ??? hmmm...I think the management should conduct regular and thorough internal audits to ensure that the information they are going to provide to the outside auditors should contain all necessary information. Regular check on the audit will ensure that they have complied with antifraud policies.

Frauds do happen in the companies. The best remedy is to conduct internal auditors regularly. We are in the modern ages with Computers. Thogh it is not total fool proof, but the technology can be pressed into service to detect daily transactions with the help of experts/internal auditors not attending in the same office premises and unknown to the staff handling the transactions. It is also suggested that in large companies where the frauds take longer to be detected the staff should be transferred from one place to another at regular intervals. It may be expensive a bit, but will check the fraud and protect with long term results.

I feel most of the accounting frauds that occur in the company is at the lower or middle management level. So by providing training to them about various types of frauds , they can be aware of common vulnerabilities.

Protecting against company fraud can be achieved through segregation of duties,proper authorisation,physical control of asset ,ensuring pre audt ,post audit,recruitment of quality staff,ensuring staff take his leave when due and finally ensuring that financial statement can be interpreted.

It is not the responsibility of the auditor to detect/ prevent fraud. First of all, the management should invest in quality people, the greatest asset for an organisation. Develop a professional culture with values and ethics. Money is not everything. There is a universal principle of balance with the mother nature. Just like the principle in Physics, energy can neither be created or destroyed, but can be converted from one form to another at a convertion cost, there is a similer law of nature exists. No body can acquire wealth or money by committing fraud. If some one acquires it with out his toil or equivalant effort, he/she cannot enjoy it. It will be short lived and he/she may suffer soon or later and lose many times the amount acquired by fraud. This is a universal phenominon and nobody is exempted. Look around and you can find plenty of examples. Even the next generations are suffering because of the frauds committed by the forefathers. So, management should build the job satisfaction as the primary concern of its people and develop a team with high values for life- not for money.

Secondly, it is the responsibility of the management to keep its assets locked from thieves. Develop a standard internal control procedure which is foolproof, with the help of dedicated quality managers. Keep on continuously improving and fine tuning the same.

Thirdly, the internal auditors, who are also should be valuing ethics more than the monthly pay, can suggest improvement to the system.

The fundamental thing always lies with the attitude of the management- when they go for bargaining for salary, they lose quality people and saves on salary bill- but spends much through embezlements and legal charges.

I think the company should do a background check on the maanagement, as even the most trustworth person can do frauds because he may have a history of fraud and dishonest behaviour which is not suitable for the management.

I think prevention of fraud is not only the responsibility of auditor but also the management should also take active stepsi in prevention of fraud.

U know in business, everything is right, like that I say that any director or any Md wants to make much more profits and less expenses in the company. thats why they want to take much more tender by giving bribe to concerned person or more rates are given, as like that they demand money more from customer. All in all we can say that everywhere, are chitting by any way in the market. so fraud is not permanent stop. there is business there is fraud. no business no fraud. as for example u can see in insurance companies they are whatever but what are they doing for customer? customer giving money to company but company giving to customer certificate. any way they are taking money by source of paper. unfortunately there is claim for insurance. company irritates the customers. company demands different types of papers certificate from customers. company know that customer would not get the paper. so customer is getting loss. So everywhere is fraud.

THE COMPANIES ARE PROTECT THE ACCOUNTING FRAUDS USE THE FOLLOWING POINTS

(A)

I THANK , COMPANIES ARE APOINT INTERNAL AUDITORS, BUT CHANGES IN AUDITORS AFTER 6 MONTH OR LAST 1YEAR, THE AUDITORS TRANSFER TO OTHER DEPARTMENT EVERY YEAR

(B)

COMPANIES ARE USE SERVICES OF WELL EXPERIENCE ACCOUNTANT & C.A.TIME TO TIME IN THE YEAR & PAY GOOD PAYMENT

(C)

COMPANIES ARE CHEK THE BANK STATEMENTS IN TIME TO TIME AND ALSO CHEK SALES TAX RETURNS,SERVICE TAX