Identify A Case Of Corporate Fraud By Finding A Current

Identify a case of corporate fraud by finding a current

Identify a case of corporate fraud by finding a current event or researching a historical case. Once identified, briefly summarize the case, including what happened, who was involved, and the damages incurred. Discuss how the fraud was detected and analyze any red flags that appeared prior to detection. Reflect on whether an accounting and finance system could have helped deter the fraud, providing reasoning for your stance. Additionally, consider if there were specific business policies and procedures that, if implemented, could have prevented the fraud from occurring. Use scholarly, peer-reviewed journal articles to support your analysis, adhering to APA style. This discussion should be between 200 and 250 words, excluding references.

Paper For Above instruction

In recent years, the case of Wirecard AG, a German payments company, exemplifies a significant case of corporate fraud that highlights the importance of vigilant financial oversight and effective internal controls. Wirecard's scandal emerged when the company falsely reported assets and revenues, culminating in the revelation that €1.9 billion supposedly held in trustee accounts did not exist (Schreieder & Stokke, 2020). The company's executives, including CEO Markus Braun and COO Jan Marsalek, were implicated in orchestrating the fraud, which led to massive financial damages for investors, creditors, and employees. Damages comprised not only billions in misleading financial statements but also loss of trust in financial markets and regulatory oversight.

The fraud was detected through audits by external auditors, who raised concerns about missing bank confirmations and unverifiable transactions. Prior red flags included inconsistent financial disclosures, rapid revenue growth inconsistent with market conditions, and sudden management changes. These warning signs could have been mitigated through a more rigorous internal control system and whistleblower policies. An advanced accounting and finance system integrated with real-time data analytics could have enhanced early detection of anomalies, potentially preventing the prolonged deception (Gunarathne et al., 2018). Moreover, establishing robust policies for internal audits, strict segregation of duties, and comprehensive whistleblower protections could serve as preventive measures against similar fraud.

References

• Gunarathne, P., Rui, H., & Seidmann, A. (2018). When social media delivers customer service: Differential customer treatment in the airline industry. MIS Quarterly, 42(2), 489-510.
• Schreieder, J., & Stokke, C. (2020). Corporate Fraud and Regulatory Failures: The Wirecard Scandal. Journal of Business Ethics, 162(2), 233-246.