Enron, WorldCom, Global Crossing, Tyco the list goes on. These companies were once the best performers in their respective fields. One factor which contributed to the downfall of these companies was accounting fraud. Irrespective of a company's competitive advantages, strategies and innovations, if it fails to prevent accounting fraud, it has to face downfall. This article, discusses different ways to prevent accounting fraud.

The term `occupational fraud' may be defined as "The use of one's occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization's resources or assets." Accounting fraud is one such occupational fraud. Accounting fraud is not executed for personal enrichment alone; pressure from the top executive is also another reason.

If companies want to prevent accounting frauds, they must identify the main source of frauds. Various fraud report surveys reveal that the employers are the main source of accounting frauds. It is reported that there is a correlation between age, sex, education, corporate position, and fraud.

The fraud triangle answers the query as to why employees commit fraud. It is accepted by everybody that employees commit fraud due to three reasons opportunity, pressure, and rationalization.

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