2. Review of Literature
Starting in the late 1990s, a wave of corporate frauds in the United States occurred with Enron’s failure perhaps being the emblematic example. Jeffords [11] examined 910 cases of frauds submitted to the “Internal Auditor” during the nine-year period from 1981 to 1989 to assess the specific risk factors cited in the Treadway Commis- sion Report. He concluded that “approximately 63 per- cent of the 910 fraud cases are classified under the inter- nal control risks”. In addition, Smith [12] offered a “ty- pology” of individuals who embezzle. He indicated that embezzlers are “opportunist’s type”, who quickly detects the lack of weakness in internal control and seizes the opportunity to use the deficiency to his benefit. Similarly, Ziegenfuss [13] performed a study to determine the amount and type of fraud occurring in “state and local” governments. His study revealed that the most frequently occurring types of fraud are misappropriation of assets, theft, false representation; and false invoice.