Internal Audit as a Tool for Combating Economic Fraud. Case Study of the Misappropriation Process of Company’s Assets

• Main Author: Michał Falkowski
• Format: Article
• Language: English
• Published: University of Finance and Management, Warsaw; Vistula University 2010-12-01
• Series: Contemporary Economics
• Online Access: http://ce.vizja.pl/en/download-pdf/id/181

The paper deals with the problem of economic fraud and the role of Internal Audit as a tool for preventing it. As the economic downturn intensifies, the possibility of disputes and other difficulties arises more frequently. More often employees and contracting parties try to shift their own losses on to other economic entities. When internal rules are broken or either are not established, organizations are exposed to risks and problems that they are often not used to dealing with. As the analyzed case study showed threats of an economic fraud can come also from inside the company. Embezzlement concerning expense reimbursement is one of the most “popular” ways to steal money from inside the company. To prevent such situations from happening Internal Audit Unit has to perform assurance and consulting actions to deter this particular and any other type of fraud. When the actual fraud occurs an important element, is the properly divide roles between an internal auditor and the forensic specialist who is adequately prepared to lead the investigation, find evidence, and bring fraudsters to justice.