Capstone Essay

653 WordsFeb 10, 20133 Pages
Assignment 3: Fraud Strayer University Capstone ACC499 May 20, 2012 Assignment 3: Fraud Discuss the nature of the fraud and the impact to the company as a result of the fraudulent activity. Bernard Madoff's created a fraudulent investment firm, resulting in its owner and founder being arrested. Madoff’s company showed impressive returns, we know now, were all made up. The Bernie Madoff Investment Securities was the company created to hatch theft schemes. Shareholders and investors depend on the recorded data to be accurate. It is used for decision making, and when there is unethical manipulation of data, everyone is at risk. Besides the laundry list of celebrities, Hedge funds, charities, financial institutions that were defrauded, Mr. Madoff confessed that his business was "all one great big lie". The investment returns were false and he had been paying old clients with money from new ones. Mort Zuckerman, the owner of the New York Daily News said that one of the managers of his charitable trust had been so taken by Mr. Madoff that he invested $9 billion with him, including all the money from his trust. The UK banks, RBS and HSBC, had clients that had investments totaling $1 billion in Mr. Madoff's funds.("," 2009) A charity set up by the Hollywood director Steven Spielberg was among the victims. Discuss “management’s” responsibility to the company stakeholders to protect and secure the company from fraudulent activity. The Sarbanes-Oxley law makes it mandatory for CEO’s and top executives responsible for signing off on all financial statements. Management is responsible for recording expenses, debits, credits, any and all financial transactions accurately. It is also mandatory for all details to be recorded at the time they occur, whether or not the transactions make the company look successful or not. The financial statements are used by the Board

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