Key Differences and Common Features of the Two Fraud Cases - Essay Example

Fraud examination Cases analysis [Insert your name here] [Insert subject] [Insert your tutor/lecturer’s name here] [Insert date here] Introduction Commonwealth guidelines defined fraud as an act of dishonestly and obtaining benefit through deception or through unethical means. Some of the behaviors’ which may qualify as fraud include; false and providing misleading information, theft, bribery, failure to provide information when it is your duty and obligation to do so, abuse of office and corruption. In order to determine whether a fraud was committed within the organization, then it is important to ask the following questions; did the activity or action result into direct or indirect benefit in terms of money or other tangible or intangible benefits to the people who are not entitled to them?, was the action committed was unlawful?, Was falls representation employed in getting the benefit? Or any attempt was made towards advancing self-interest or above activities? This paper has analysed two cases of fraud of different classification) that happened in Australia in the past ten years. The paper will analyse the two cases separately and discusses key differences and common features of the two fraud cases. The paper will further presents the recommendations on how victims and other concerned parties could prevent these types of frauds. Case 1: Adelphia Cable Company in 2002 In Australia, one of the common and well known fraud case happened in Adelphia Cable Company in the late 2002, during the Wall Street crisis. Adelphia was formed in 1952 by John Rigas with customer base of less than 25; the company grew rapidly in the cable industry and by the beginning of 1970’s the customer base grew to over 6000 customers. After its incorporation, by late 1980, the company stated trading publicly in the stock exchange. The cable industry began weakening by early 1990’s due to high competition in the industry, over capacity and slow economic growth consisting of high inflation rates, Mahar and Fischers, (2003). This became a golden opportunity for Adelphia to expand to internet cable business and in the telecommunication industry. This ambitious expansion made Adelphia to be one of the biggest companies by late 1990. In the year 2002, the first fraud activity was detected in the company operations when the chief finance officer revealed in a conference that a loan of over $2.3billions has been cosigned by another company in which John Rigas was a partner in. According to Nazum (2004), this resulted into criminal inquiry by the board of stock exchange. The investigation was back dated to 1999. This forced Rigas and his family to resign from the company. The share price of the company drastically dropped from around $28 to close to 78 cents forcing SEC to deregister the company from trading in the stock market Benett et al, (2005). Due to this the company was forced to apply for bankruptcy notice in order to reorganize its activities. The fraudulent activities in the Adelphia Company included among others; hiding debt among its subsidiary in which there was misrepresentation of fact for the benefit of the co-founder of the company. This information gave the investors false representation of the Company as the debt of the subsidiary was increased while that of the Adelphia was decreased with the same amount showing the company was liquid and is able to pay off its debts which was not the case. This continuous misrepresentation made the public to know that the company was indeed performing well which was not the case and this actually made the public to think that the company management was just keeping fictitious document to proof their transactions which were not there. Secondly the company fraudulently misrepresentation of their financial statement to comply with the Wall Street financial analyst projections, and this further mislead the investors that the company was doing well and actually exceeded their expectation of return. They also mismatched the revenue generating factors where the included revenue from internet subscription activities into cable and fails to follow the revenue recognition concept in preparing their financial statement hence giving inflated account balance which was not the case. The last fraudulent activities in the Adelphia books of account are the misrepresentation of material fact which contravene accounting standards and principles of true fair view of the financial statements. These acts of fact conciliation were to prevent the unfair deals of the Rigas family in the company hence protecting their interest. Case 2: academic fraud in Australia, the “Mytutor” Case This part discusses on cases of academic fraud cheating in Australia. It further points out various individuals responsive on students cheating. In Australia, some students cheat by buying solutions to assignments and paying other people to sit their exams. It discloses the fact some tutors go to an extent of sitting student’s examination for them to be paid by the students. It further stated that students obtain material from a private tutor to aid in their learning assignments. Academic fraud by definition is the processes of submitting work belonging to someone else without giving credit where due which might lead to prosecution in the Australia courts and courts around the world (Clement, 2010). The “Mytutor” Case is where most students tend to seek help in their studies from variety of sources, comprising of friends, staff, university-provided drop-in centers, family, and external tutors (Clement, 2010). Investigation carried out however, prove that a tutor by the name Kyle1 seemed to be vending on assignments to numerous number of Australian students. For instance, in one assignment in one offering of one large subject, different number of nineteen assignment submissions actually authored by the private tutor was found. On investigation further it was revealed that he seemed to have been active for a minimum of three semesters, and was not only allegedly selling solutions but was sitting exams, that is, posing a lot of problems to students .Students attending high school have ample businesses grounded on providing tuition, such as firms hiring university students. According to Zobel and Hamilton (2002), a typical outside tutor for any university students is a distinct or minor agency specifically working in a certain discipline or even in the offerings of a particular department, and providing one-on-one tuition. He further stated that these tutors put their advertisement in student organization and by word-of-mouth. However, the numbers of reserved tutors are hard to accurately give an estimate, for a large (Quinn, 1999). In addition, several tutors provide their training on an infrequent basis; some of older students are instructors of students in initial years of their study programs, for example, these tutors have one thing in common, in that, they function largely or completely outside the learning institutions, and are therefore very challenging to give close supervision or police. Numerous numbers of these instructors might be entirely genuine, providing assistance while staying inside the limits of acceptable academic behaviour. However, some go to an extent of providing more help than is acceptable by their institutions and, come under gravity to do what law not recommends. In the learning framework of normal approaches to noticing plagiarism, such misbehavior is hard to notice. “Mytutor” was one such outside tutor providing teaching to students from personal home. Only an arrangement of fortunate events managed to his disclosure; even then, coming with a case for his trial was far from candid, and eventually was not completely successful. Moreover, there is extensive concern about cheating and plagiarism in universities. In current years, several Australian universities have engaged steps to discuss on plagiarism (Clement, 2010). The final is “internet” case cheating in the Australian where composition make-up of constitution does not clearly provide for liberty of speech or press, the High Court has held that a factual to freedom of speech should implied be implied in the law, and the regime largely esteems these rights in practice Zobel and Hamilton (2002). An active judiciary, self-regulating press and a working independent political system and an association to ensure liberty of speech and a case which promoted internet fraud in exams should be established, (Quinn, 1999). According to Quinn (1999), there was no government limit on access to credible or the internet reports and that the government regularly checked e-mail or web chat rooms. Groups and individuals can and do involve in the countenance of opinions via the Internet, even by the use of e-mails. Internet restriction in Australia now consists of a controlling government under which the (ACMA) has the authority to impose content limits on Internet information introduced in Australia, and uphold a "black-list" of internal internet websites which provide on use of purifying software over the internet (Clement, 2010). According to Quinn (1999), students can be reached using various disciplinary processes, which exterior tutors cannot; this is vibrant from different practices that a sole exterior tutor might be included in a great many cases of plagiarism. Finally, captivating action in contradiction of such a tutor is extreme from upfront like when the instructor has done an exam on a student’s behalf. Discuss key differences and common features of the two fraud cases The fraudulent activity in Adelphia was one scandal which gives three types of fraudulent activities at one. They included misrepresentation of information to investors in the books of account. Secondly it involves corruption activities in which the company managing director is misusing their position for selfish gain from the investors. And lastly falls representation of facts in the financial statements hence lack of integrity in the business. The “Mytutor” Case involved education sector. In the learning framework of normal approaches to noticing plagiarism, such misbehavior is hard to notice. “Mytutor” was one such outside tutor providing teaching to students from personal home. Only an arrangement of fortunate events managed to his disclosure; even then, coming with a case for his trial was far from candid, and eventually was not completely successful. Recommendations on how victims and other concerned parties could prevent these types of frauds The Deloitte Company who was providing the auditing activities failed to advise and protect the interest of the public against the malpractice by the company but continuously giving unqualified opinion on the activities of the company. This made the auditor to be one of the first casualties of the fraudulent case against the Adelphia Company and its directors. Discussed are some of the ways of eliminating fraud opportunities: Have good internal controls, discourage collusion, monitor employees and provide a whistle-blowing system, creating an expectation of punishment where necessary. Conclusion In conclusion, companies and universities need to face the realities of workplace institutions fraud. The universities’ legal duties are progressively dictated by regulations from many different governmental agencies’ requirements. At first glance, steering a workplace deception investigation might appear intimidating, but in truth, it is only somewhat unlike from any other workplace investigation. In Adelphia Company case, the subsidiary in which they co-signed the credit with was not a consolidated subsidiary meant that the credit was not reflected in the company books of account hence the principle of true and fair view of accounting information was not captured in the books of account. This resulted into indirect benefit to unintended person hence resulting into fraudulent activity. As with all inquiries, groundwork, documentation, results of integrity and piloting the study in a fair and fair fashion are the important features of a thorough and effective investigation. Abundant of the discussion on learner cheating has directed on copying, with a consistent emphasis on technology for copy-detection. Such technology offers no capacity to notice whether learners are finding work from other sources, while, as exemplified the current chance finding of such a case, it might not be unusual for learners to do so. Therefore, methodical invigilation and validating is obligatory if the prospect to pass a gradation by dishonest is to be eradicated, and if learners are to study that, they want to do the effort of their work themselves for them to become competent problem solvers. References Benett, R,J, Thou s and Scouten, J (2005), “I deserve more because my name is on the door”. Entitlement embeddedness and employees deviance in the family business Clement, M. J. (2001). ‘Academic dishonesty: To be or not to be?’, Journal of Criminal Justice Education 12. Mahar J and Fischer C, (2003), Adelphia communication Nazum C, (2004). Executive on trial Adolphia Jurors ask to review dozens of pieces of evidence. Zobel, J. & Hamilton, M. (2002). ‘Managing Student Plagiarismn in Large Academic Departments’, Australian Universities Review 45(2), 23–30. Quinn, S. (1999), ‘Plagiarism, the internet and journalism education’, Australian Journalism Review 21(3), 205–211. Read More