| Summary: | 碩士 === 國立中央大學 === 管理學院高階主管企管碩士班 === 96 === The adverse impact of financial fraud, not only on individuals and the commercial sector but even on national economic systems, is increasing rapidly worldwide. Seeing that the loss caused by financial fraud, the authorities and financial intermediates concentrate on the prevention of fraud. However, to prevent its happening, you must understand the cause of it. Thus, this research is based on significant financial fraud occurred since 1995, including the fraud of International Security Corp., the fraud of Rebar Group, the fraud of Barings Bank, and the fraud of Daiwa Bank to discuss topics as follows:
1. Use case study to deduct the causes of financial fraud.
2. The causes of financial fraud are distinguished as internal factors and external factors. Internal factors consist of four elements: Scenario pressure, fraud opportunity, characteristics, and corporate governance; External factors consist of Certified Public Account and supervision authority.
3. Analyze the problems and disadvantages to make conclusions of whether fraud is caused by internal factors, external factors, or both. Thereafter, suggest effective anti- fraud policy.
This research methodology is based on case study. The study focuses on the discussion of related financial fraud issues and internal control by collecting data worldwide and analyzing the information contained.
This research discovers that both foreign and domestic financial intermediates execute internal control system, but frauds still occur once in a while. The case studies contained in this research all occurred because the employees overrided the internal control system, which allowed the perpetrators to grasp the opportunity to perpetrate frauds. The fraud of International Security Corp., the fraud of Barings Bank, and the fraud of Daiwa Bank occurred due to the employees or junior managers’ override of controls. Further, the fraud of Rebar Group’s management override of control makes the internal control system effortless and beyond the cooperate governance.
If internal defense is broken, external auditing CPAs or the supervision authority redress timely, loss of fraud can still be minimized. On the contrary, as fraud period prolongs, fraud range enlarges.
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