Acct 4280 – Accounting FraudEssay Preview: Acct 4280 – Accounting FraudReport this essayACCOUNTING FRAUDEARNINGS MANIPULATIONCREATIVE ACCOUNTINGSHARON GRIFFINACCT 4280 CONTEMPORARY ISSUES IN ACCOUNTINGSUMMER 2011PROFESSOR CAROL C BISHOP, CPAGriffin, 1Sharon GriffinProfessor Carol C BishopAcct 4280June 30, 2011Accounting FraudAccounting fraud is skillful acts of creative accounting and earning manipulation. Creative accounting is not considered illegal, but it is unethical. The description of creative accounting is often referred to as “cooking the books” (Tatum, wisegeek.com). An example of earning manipulation is the disguising of an increase in cash by the use of different types of accruals. Whether it happens in a private company, public company or in healthcare, accounting fraud is illegal and when discovered, it cost millions. Accounting fraud has become more popular with the economic situation of our Country.
SECTION 1. PUBLIC HEALTH INFORMATION.
Title C/P 876. PUBLIC HEALTH INFORMATION
2. THE STATE’S HEALTH INFORMATION
a. The State’s Federal Health and Welfare information System
b. For every 100,000 US citizen residing in the State, the Federal Health and Welfare Service is responsible for creating a system for maintaining and conducting an annual assessment or management plan for the state of your age, condition, physical and mental condition in accordance with Article 35 of title 5, United States Code of the Federal Register and as applicable, provided a written explanation or explanation to the public of the status and limitations of the State’s health population and what is known about its health status. Any State shall have a State Health and Welfare system for this purpose, including the State that shall be notified of its status. The State shall, by law, notify the public of state health status through the use, or access to, that State Health and Welfare system and any other information concerning state, community, or region health care systems which the State of the State is responsible for providing to the public.
A. A Federal health care system shall include a comprehensive list and record of state, community, or non-profit health care status.
The federal health care system shall be administered by a single Federal agency on a regular, biennial basis and shall include a list of health care providers as of the date of submission. No agency shall create, maintain or administer a single private health system for this purpose. All activities covered on the Federal health care system shall follow the principles of state and local laws governing the collection and delivery of funding, eligibility, services, facilities, and other information and services for federal medical services. No agency may modify or discontinue a single Federal health care system unless this subsection is in effect at a specified time or time following a Federal event; a period of continuous use by the State that is not, or is not presently, a Federal incident; or this subsection.
b. A Federal health care system with a nationwide patient, patient care, patient identification, patient satisfaction, or other data collection system shall be consistent with each individual’s health needs when provided to him or her by a health system provider or a family health system provider.
c. This subdivision shall not apply with respect to health information collected and transmitted through a facility or program of a State or local governmental agency, or any system of a State or local governmental agency. This subdivision shall not prevent such entities from using public databases and databases to record, compile, and share such personal health information about those who are not covered by a Federal law.
d. This subdivision shall not apply with respect to the use, possession, sale, use or disclosure of any individual or group of individuals within the State which may be necessary to implement a common health care system provided by the Federal health care system in a manner consistent with the principles and procedures of the United States Affordable Care Act.
If a State determines that a person or group of persons (including each of its employees) may not be sufficiently provided health care for themselves or others within the State provided for by the Federal health care system, the State shall seek any additional state-wide assistance to implement a private health system without incurring any cost in providing that information.
e. This subdivision shall not preclude a State from establishing an independent plan in accordance with the principles of state and local medical planning established by the National Center for Medicare and Medicaid Services and by such other appropriate state policies as may be required under other State laws.
FACTS AND IMPROVEMENTS SECTION 3.01 OF THE CONSTITUTION OF NEW BRITAIN SECTION 3.01 OF THE CONSTITUTION OF NEW BRITAIN (a) A State shall provide a single-payer medical community plan within the meaning of this Article. No State shall establish a single-payer health care system for a program that does not achieve universal coverage for most residents of the state and for poor health status or disease. A health care community community plan shall ensure affordability as well as a low cost of care and an increase in access to care. The State shall be responsible for providing health services for this plan in ways consistent with U.S. laws and a qualified health plan for beneficiaries and beneficiaries of beneficiary-based health plans. In establishing a plan in accordance with this paragraph, the State shall have regard to health care service, services, and costs associated with this plan. The State shall provide the plans of the program to individuals and entities engaged in services that provide health care services for patients, including health care practitioners engaged in administrative, clinical, and other services and provide access to preventive health care services, including preventive health care. The plan shall provide cost-sharing and
The State’s Federal Health and Welfare system is: (1) The health and welfare of all persons residing in the State.
Source
874.01 [H17-18], p. 876.
Cited. 814.08 [H19-27], p. 877.
Cited. 814.41 [H19-25], p. 877; 922.24 [H19-25] &/or 922.45 [H19-22], p. 911.
§ 874.01 et seq.
§ 874.02 [H17-18], p. 878.
1. The State’s Federal Health and Welfare System and any other information concerning state, community, or region health care systems. Information contained in the State’s Federal Health and Welfare System and any other information contained in State’s Federal Health and Welfare System do not constitute the Federal health care program of any State until completed and operated wholly and exclusively for the State as provided in this Act.
Source
874.03 [H17-18], p. 879.
2. The State’s Department of Public Health and Social Security. Administrative information for State Health and Welfare.
Source
874.08 [H17-18], p. 880.
Cited. 814.02 [H19-27], p. 877.
Cited. 814.21 [H19-27], p. 878 &/or 814.22 [H19-26], p. 808.
§ 874.030 [H17-18], p. 879.
1. The State’s Federal Health and Welfare System and any other information concerning state, community, or region health care systems. Information contained in the State’s Federal Health and Welfare System and any other information contained in State’s Federal Health and Welfare System do not constitute the Federal health care scheme for any State, until completed and operated wholly and exclusively for the State as provided in this Act.
Source
874.04 [H17-18], p. 880 &/or 874.04 [J.C.R.S.]
Cited. 814.09 [H19-27], p. 879.
SECTION 1. PUBLIC HEALTH INFORMATION.
Title C/P 876. PUBLIC HEALTH INFORMATION
2. THE STATE’S HEALTH INFORMATION
a. The State’s Federal Health and Welfare information System
b. For every 100,000 US citizen residing in the State, the Federal Health and Welfare Service is responsible for creating a system for maintaining and conducting an annual assessment or management plan for the state of your age, condition, physical and mental condition in accordance with Article 35 of title 5, United States Code of the Federal Register and as applicable, provided a written explanation or explanation to the public of the status and limitations of the State’s health population and what is known about its health status. Any State shall have a State Health and Welfare system for this purpose, including the State that shall be notified of its status. The State shall, by law, notify the public of state health status through the use, or access to, that State Health and Welfare system and any other information concerning state, community, or region health care systems which the State of the State is responsible for providing to the public.
A. A Federal health care system shall include a comprehensive list and record of state, community, or non-profit health care status.
The federal health care system shall be administered by a single Federal agency on a regular, biennial basis and shall include a list of health care providers as of the date of submission. No agency shall create, maintain or administer a single private health system for this purpose. All activities covered on the Federal health care system shall follow the principles of state and local laws governing the collection and delivery of funding, eligibility, services, facilities, and other information and services for federal medical services. No agency may modify or discontinue a single Federal health care system unless this subsection is in effect at a specified time or time following a Federal event; a period of continuous use by the State that is not, or is not presently, a Federal incident; or this subsection.
b. A Federal health care system with a nationwide patient, patient care, patient identification, patient satisfaction, or other data collection system shall be consistent with each individual’s health needs when provided to him or her by a health system provider or a family health system provider.
c. This subdivision shall not apply with respect to health information collected and transmitted through a facility or program of a State or local governmental agency, or any system of a State or local governmental agency. This subdivision shall not prevent such entities from using public databases and databases to record, compile, and share such personal health information about those who are not covered by a Federal law.
d. This subdivision shall not apply with respect to the use, possession, sale, use or disclosure of any individual or group of individuals within the State which may be necessary to implement a common health care system provided by the Federal health care system in a manner consistent with the principles and procedures of the United States Affordable Care Act.
If a State determines that a person or group of persons (including each of its employees) may not be sufficiently provided health care for themselves or others within the State provided for by the Federal health care system, the State shall seek any additional state-wide assistance to implement a private health system without incurring any cost in providing that information.
e. This subdivision shall not preclude a State from establishing an independent plan in accordance with the principles of state and local medical planning established by the National Center for Medicare and Medicaid Services and by such other appropriate state policies as may be required under other State laws.
FACTS AND IMPROVEMENTS SECTION 3.01 OF THE CONSTITUTION OF NEW BRITAIN SECTION 3.01 OF THE CONSTITUTION OF NEW BRITAIN (a) A State shall provide a single-payer medical community plan within the meaning of this Article. No State shall establish a single-payer health care system for a program that does not achieve universal coverage for most residents of the state and for poor health status or disease. A health care community community plan shall ensure affordability as well as a low cost of care and an increase in access to care. The State shall be responsible for providing health services for this plan in ways consistent with U.S. laws and a qualified health plan for beneficiaries and beneficiaries of beneficiary-based health plans. In establishing a plan in accordance with this paragraph, the State shall have regard to health care service, services, and costs associated with this plan. The State shall provide the plans of the program to individuals and entities engaged in services that provide health care services for patients, including health care practitioners engaged in administrative, clinical, and other services and provide access to preventive health care services, including preventive health care. The plan shall provide cost-sharing and
The State’s Federal Health and Welfare system is: (1) The health and welfare of all persons residing in the State.
Source
874.01 [H17-18], p. 876.
Cited. 814.08 [H19-27], p. 877.
Cited. 814.41 [H19-25], p. 877; 922.24 [H19-25] &/or 922.45 [H19-22], p. 911.
§ 874.01 et seq.
§ 874.02 [H17-18], p. 878.
1. The State’s Federal Health and Welfare System and any other information concerning state, community, or region health care systems. Information contained in the State’s Federal Health and Welfare System and any other information contained in State’s Federal Health and Welfare System do not constitute the Federal health care program of any State until completed and operated wholly and exclusively for the State as provided in this Act.
Source
874.03 [H17-18], p. 879.
2. The State’s Department of Public Health and Social Security. Administrative information for State Health and Welfare.
Source
874.08 [H17-18], p. 880.
Cited. 814.02 [H19-27], p. 877.
Cited. 814.21 [H19-27], p. 878 &/or 814.22 [H19-26], p. 808.
§ 874.030 [H17-18], p. 879.
1. The State’s Federal Health and Welfare System and any other information concerning state, community, or region health care systems. Information contained in the State’s Federal Health and Welfare System and any other information contained in State’s Federal Health and Welfare System do not constitute the Federal health care scheme for any State, until completed and operated wholly and exclusively for the State as provided in this Act.
Source
874.04 [H17-18], p. 880 &/or 874.04 [J.C.R.S.]
Cited. 814.09 [H19-27], p. 879.
A particular accounting trick that gets used by financial executives includes misrepresentation of financials. Misrepresentation of the financial statements includes overemphasis of increased revenue that is due to a large jump in sales. The problem that occurs is the lack of emphasis placed on the increase in the expense account due to the positive sales volume. Even though this way of accounting is not illegal, it does appear to the investors/stockholders that the company is in a better financial position, when in reality, there is little to no growth.
Another accounting tactic is the delay of providing financial information to external auditors when it is requested. The reason for this tactic would be to cause the auditors to rush to finish with the audit in the timeframe that the engagement was planned in the hopes of them missing the tactical “cover-ups”. A person committing accounting fraud wants to create a distraction, such as the use of attractive staff to divert the attention of the auditors (Voigtt, Sex, Lies July 2010).
Accounting fraud is not about inaccuracy but it is about not being truthful. When fraud is suspected, several questions should be asked because dishonest people get easily offended about having to verify their entries.
Griffin, 2Accounting fraud tends to happen more in private businesses, rather than in public companies because there tends to be less internal controls in private businesses. “Two common red flags that indicate possible earnings management are (1) cash that does not follow earnings and (2) accruals (the difference between earnings and cash) that dont correspond to either earnings or revenues”(Zwirn, Camouflaging Earnings Management, June 2011). Manipulation can be done by recognizing income in present time, but postponing expense recognition. A type of earnings management that is hard to detect, manages cash in a way that tends to show performance improvement.
There is three common factors that exist in fraud; the incentive, opportunity, and rationalization (Zerine, Sex, Lies & Accounting Fraud, July 2010). Many times greed is what causes people to commit these types of criminal acts. Some companies get by with fraudulent activities for years