Conceptual study of fraud and the accounting system
Md. Abdul Baten
The concept of fraud, its antecedents and outcomes as well as its detection and prevention, have been discussed by both academics and practitioners for decades. The effects of crime act upon the economy in two primary ways. Microeconomics deals with the effect on individuals and businesses. Macroeconomics deals with the effect on the local community, national, and international economies. Individuals and businesses can easily understand the effect of crime in their everyday activities. However, most individuals and businesses have difficulty understanding the effect of crime on the community, national, and international levels. This paper provides an overview of the recent evolution of Accounting Information Systems (AIS) and their controls for combatting fraud and misconduct. Many completed and ongoing studies have demonstrated the beneficial impacts of AIS on organizations. These studies also summarize potential threats to AIS from employee and/or management ethical misconduct or attempts to commit fraud. Such threats can result in misrepresentation in Financial Accounting reporting for both external and internal and can have undesirable impacts on the integrity and exactitude of the organization’s financial reporting and its overall corporate image.