Ethics: Fraud and Financial Risk Management Flashcards Preview

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Flashcards in Ethics: Fraud and Financial Risk Management Deck (10):
1

Explain the term "Ethics"

Refers to a set of moral principles of values that are embraced within a certain community. Written or unwritten, they direct the business to encourage public confidence

2

Name 12 VALUES that should be fundamental in a business community

- Honesty
- Self-control
- Trustworthiness
- Concern for others
- Keeping promises
- Respect for legitimate authority
- Fairness
- Civility
- Discipline
- Morality
- Accountability
- Integrity

3

What happens when social values deteriorate?

It becomes increasingly difficult to maintain high ethical standards in accounting and business

4

Name and explain the ELEMENTS of fraud

- Unlawfulness: wrong action in law and society
- Misrepresentation: False statements, undisclosed information
- Intent: Foresee that victim would be deceived
- Prejudice: Discrimination

5

Name the areas where FRAUD CAN OCCUR in a business

- Asset misappropriation (Theft, misuse)
- Fraudulent financial statements
- Cheque fraud
- Computer crime

6

Name six ways in which a business owner can COMBAT FRAUD

- Good staff development programmes
- Sound mutual in inter and intra-personal relationships
- Ragular stocktaking
- Internal and external audit
- Anti-corruption LAWS
- Solid PRESENTATION of techniques and procedures

7

Suggest a FOUR STEP APPROACH that Annietjie could follow to prevent fraud in her hair salon in Katutura

1. SCREEN for fraudsters before hiring
2. REDUCE opportunities for fraud
3. Create an "anti-fraud" ENVIRONMENT
4. PROSECUTE all fraudsters

8

What is financial risk management?

A business needs clear objectives. Human beings = theft, fraud, corruption.
- Know
- Anticipate
- Keep risks to a minimum

9

Provide some guidelines in MANAGING FINANCIAL RISKS

- ASSES and analyse the system in use
- FORECAST what might go wring
- Asses the recording of a NEW ASSET bought
- Minimise risks

10

How can one MINIMISE RISKS in financial risk management?

- DEFINE risks
- Be PRO-ACTIVE
- DESIGN systems, policies, rules, regulations
- Managers and employees must COMPLY
- Rules must be TRANSPARENT & objective