The paper 'Clive Peeters Company $20 Million Employee Fraud" is a great example of a finance and accounting case study. Fraud is defined as all diverse methods that the human mind can come up with to take advantage of another individual by suggesting false statements or withholding the truth. It involves all manner of surprises, tricky behavior, craftiness or dissembling, and any unjust way which another individual is cheated (Black’ s Law Dictionary 2014). Based on common law, the constituents of fraud are; a statement that is false and which is made with the intention of deception, the reliance of the victim on the statement and the damages that occur due to the statement. There are many classifications of fraud.
There is internal fraud which is perpetrated from within the company and external fraud where the fraudsters come from outside the company. Financial fraud is the most common type of fraud with categories such as payroll fraud, double-checking fraud and concealment. Types of fraud within financial and insurance organizations include false invoicing, credit card fraud which is committed by external parties and theft of cash.
The categories of fraud found in corporate organizations, both non-finance and non-public sector are such as overstating or understating of assets, theft of cash and theft of inventory. Fraud within the public sector consists of deceptive tendering and misuse of non-cash assets (KPMG 2013). A KPMG study in New Zealand and Australia of bribery, fraud and corruption in 2012 showed that over the last eight years, more senior management personnel have been involved in fraudulent activities within their companies and as such the risk potential for loss and damage is very high (KPMG 2013).
The survey also revealed that most fraudsters have no history of fraudulent behavior and that men are thrice more prone to engage in fraud than their counterparts; women. This retro respect paper seeks to discuss the $20 million internal fraud that occurred in Clive Peeters company between the years 2007 to 2009. Fraud in Clive Peeters The fraud in Clive Peeters Company is a clear example of the devastating effects of fraud. Before its decline in business, Clive Peeters was once an Australian electrical company that supplied electrical appliances, computers, kitchens and white goods.
It had stores in Victoria, Tasmania and Queensland. The fraud was committed by Sonya Denise Causer, who was the payroll manager at that time. Sonia Causer committed the fraud by falsifying the entries in the company’ s payroll accounts. The falsified entries enabled the transfer of cash from Clive Peeter’ s reservoir account to her private account. The money was then used to purchase property with the worth of slightly under 20 million dollars. The nature of fraud has continuously evolved with the perpetrators being more creative.
The fraud landscape has further been amplified by the use of the internet for transactions where access is made easy by hackers or when an employee intentionally or unintentionally gives away information that is bound to disclose the company’ s confidential information. The fraudster at Clive Peeters used her internet banking right of entry of the business to move the difference between the genuine and the reported expenses to the accounts of the bank over which she was in control. KPMG has reported that asset and revenue misappropriation is the most common of frauds and this tally with the method the previous payroll manager at Clive Peeters used to commit fraud.
Garner B, A. (2014). Black's Law Dictionary (Standard Edition, 10TH Edition )
KPMG Forensic, (2013). Survey of fraud, bribery and corruption in Australia and New Zealand. KPMG LLP
Thompson J (2009, August 12). Clive Peeters hit by $20 million employee fraud – how you can avoid getting stung. Retrieved from http://www.smartcompany.com.au/growth/economy/10433-20090812-clive-peeters-hit-by-20-million-employee-fraud-how-you-can-avoid-getting-stung.html
McNeal (2015). What is your fraud IQ?: Journal of Accountancy
Farnsworth S. (2010, August 19). Rogue accountant jailed over Clive Peeters theft. Retrieved fromhttp://www.abc.net.au/news/2010-08-19/rogue-accountant-jailed-over-clive-peeters-theft/950578
Battersby, L and McIIwraith I. (2009, December 9). How Clive Peeters lost then found its $20M. Retrieved from http://www.smh.com.au/small-business/managing/how-clive-peeters-lost-then-found-its-20m-20091207-kduh.html
Winterford, B. (2010 August 20). Eight year prison sentence for Clive Peeters accountant. Retrieved from http://www.itnews.com.au/news/eight-year-prison-sentence-for-clive-peeters-accountant-229460
Shields, A. (2009, August 12). Internet banking fraud- Clive Peeters case. Retrieved from http://www.dolmanbateman.com.au/604/internet-banking-fraud-clive-peters-case/