Misappropriation Of Assets

Introduction
Over the past two years, corporate America has endured a plethora of fraudulent acts committed by those of high status within their respective corporations, most of which involve internal fraud.   Internal fraud has two main aspects, misappropriation of assets and fraudulent financial reporting, with the focus of this discussion lying within the former.   Misappropriation of assets is defined as fraud for personal gain.   It is the most common type of fraud found among employees and frequently includes theft of cash and inventory.  
Misappropriation of asserts, better yet, fraud in general, is relevant to and pivotal for accountants, auditors, and people in business for the simple fact that the losses from fraud affects the economy as a whole.   "Fraud is not [just] an accounting problem; it is a social phenomenon." (Wells 2004)   Accountants, auditors, and business people all separate but similar responsibilities to uphold, in reference to the general public and agencies overseeing their performance.   These responsibilities include possessing integrity, practicing fair disclosure of relevant information, and ensuring that the information provided is reliable.   Misappropriation of assets violates all of these responsibilities in the fact that there is no integrity in thievery; concealment of the crime disagrees with the fair disclosure responsibility; and, falsifying documents to avoid detection guarantees unreliable information.
Misappropriation of Assets
Some brief examples of misappropriation of assets as committed by lower level employees include theft; misuse, more specifically, personal use of inventory and other assets; and payroll schemes that involve using ghost employees and falsified wages.   The answer for preventing fraud can be found within internal control activities.   "Separation of duties between authorization, custody, and recordkeeping functions" can help deter these white-collar criminals, along with frequent performance...