ACCOUNTING FRAUD

Table of contents:
Table of contents: 1
Introduction: 2
1. Theoretical Framework: 2
1.1. Theoretical Model of Fraud: 2
1.2. Health south case and Fraud triangle: 2
1.3. The motivations behind the accounting fraud at HealthSouth: 2
2. Social Framework: 3
2.1 Culture of the organization in which fraud occurred 3
2.2. Company’s management impacted by the fraud and the investigation 3
2.3. Employees of the company impacted by the fraud and its investigation 3
2.4. Impact on the public by this fraud: 4
3. Ethical Framework for the auditors and fraud examiners: 4
3.1 Fraud Examination as a global designation: 4
3.2 Fraud examiners adherence to code of ethics in HealthSouth case: 5
3.3 How could have deception been used in interviewing and is it an ethical way: 5
3.4 Appropriate way of conducting investigations: 5
4.Legal Framework 5
4.1 Impact of Court rulings 6
4.2 Adjudicating the case civilly 6
4.3 Criminal prosecution: 6
Conclusion 6
References: 7

Introduction:
Accounting Frauds have been going on in the US and world over since the past two decades. HealthSouth Fraud case is one among them. This paper analyses the HealthSouth accounting fraud using the Fraud triangle theory and also discusses the social, cultural, ethical and legal framework of the Fraud and its investigations.
1. Theoretical Framework:
1.1. Theoretical Model of Fraud:
The theoretical model that best applies to the health south fraud case is the fraud triangle model. Fraud triangle model uses three factors that influences the commitment of fraud by the corporations. And these factors include pressure, opportunity and rationalization. These three factors provide the reasoning for an employee to commit workplace fraud. The pressure on the individual is the prime motivation behind any accounting fraud and this can either be financial pressure like debt problems or a revenue shortfall. This pressure is seen as unsolvable by traditional and legal routes and hence the employee might resort to committing fraud. Maintaining the lifestyle to which one is used to is also seen as a pressure as was noted in the case of Scrushy. Pressure can be in the form of financial

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