Kyle Welch
2/19/2015
Fraud Paper In the movie “Office Space”, three men at an Information Technology company begin to commit computer fraud. They embezzle (steal) a fraction of a penny from each of the company’s financial transactions to a separate account of their own. Because the amount of money seems so small, it seems unlikely that anybody would notice the missing money. The fraud they commit in the movie is referred to as misappropriation of assets, which is the embezzlement of company assets by directors, other fiduciaries or employees. Misappropriation of assets is the most common and widespread fraud reported by companies. Whenever an employee commits fraud it is because of three elements, either combined or individually the reason behind their crimes. The first reason somebody would commit fraud is pressure, their incentive. In the movie “Office Space”, the main character seems to feel emotional pressure to steal from the company. He maybe had strong feelings of resentment to the company or felt they were treating him unfairly. He was constantly called in to work on weekends when he was supposed to be off, and also was not receiving a salary very appealing to him. The second reason somebody would commit fraud is the opportunity, the condition or situation that allows a person or organization to commit and conceal a dishonest act and convert it to personal gain. In the movie the main character has a friend at the company who says he can put a virus into their computer system to embezzle the funds. He also finds out that that friend was going to be laid off, so he tells him ahead of time. He saw the opportunity to commit fraud because his friend was probably now feeling the pressure or incentive to do so. The company obviously did not have top notch security for defending against this misappropriation of assets that the men were about to begin. The third reason people commit fraud is rationalization, the excuse that fraud perpetrators use to justify their illegal behavior. The majority of people who commit fraud make excuses such as, what they did was not that serious, or the company owes it to me for what I have done for them. The men in this movie probably do think the company owes them some money, especially after laying some of them off. They might have also thought to themselves, “Nobody will ever know” because the amount of money being stolen seemed so small. The main character might have even thought that the rules did not apply to him after he decided he was not going to go to work anymore earlier in the movie. Together these three reasons make up what is known as the Fraud Triangle make up the foundation for the committing of any type of fraud. Companies can prevent and greatly reduce these types of frauds from occurring by strengthening their internal control, the processes and procedures implemented to provide reasonable assurance that control objectives are met. There are three functions of internal controls. Preventive controls deter problems before they arise, such as hiring qualified employees or segregating employee duties. The second function of internal control is detective controls. Detective controls are designed to discover control problems that were not prevented. Examples could be monthly trial balances or duplicating the checking of calculations. The final type of internal control function is corrective controls, or controls that identify and correct problems as well as correct and recover from the resulting errors. An example would be resubmitting transactions for subsequent processing or maintaining backup copies of files.
These three functions are used together in the two categories of internal control, general controls and application controls. General controls make sure the company’s control environment is stable and well managed. For instance, security and IT infrastructure would help keep a company stable. Application controls prevent, detect, and correct transaction errors and fraud in application programs. They make sure accuracy and validity are accomplished. If a company implements all of these strategies they should successfully safeguard themselves against fraud and dishonesty throughout their organization.
Fraud can be a very enticing opportunity to many people and I have experienced it to a certain extent. I have had my debit card number hacked before and websites started to charge my card for services they provided. I did not purchase anything or any subscriptions so I had to tell my bank and cancel my card immediately. After this happened I did not even use a debit card anymore for almost two years.

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