The management have responsibility to prevent the fraud.

Fraud can be reduce through a

combination of prevention, deterrence and detecting measures. A good control of fraud persuade
employees to not doing fraud because manager can detect in and give punishment. The AICPE has
create a program, named “management antifraud programs and controls: guidance to help prevent
deter , and detect fraud”. This guidelines identified three actions:
1. Create and maintain a culture of honestly and high ethics.
2. Evaluate fraud risks and implement program and controls to mitigate identified fraud risk.
3. Develop an appropriate fraud oversight.
Research says that the most effective way to prevent and deter fraud is to implement programs and
controls that are based on core values embraced b the company. Creating a culture of honestly and high
ethics includes six element:
1. Setting the tone at the top management
The manager has create a level to persuade goals and targets while at the same time requiring
honestly and ethical to reach it.
2. Creating a positive workplace environment
Management has build a positive environmental workplace to persuade staff to reach the goal.
3. Hiring and promoting employees
A company will prevent the fraud with doing background check of all staff and doing a
controlling.
4. Training
All new employees should be trained about the company’s expectation of employees’ ethnical
conduct.
5. Conformation
After the training program, the employees has confirm their responsibility for complying with
the code of conduct.
6. Discipline
The employees has to follow company’s code of conduct.
Fraud can be easily detect if the manager know how to detect it. Actually it takes a simple step to detect
the fraud:
1. Identifying and measuring
The manager has to detect the fraud that will appear from all situation.
2. Mitigating fraud risk
Manager had responsibilities to designing and implementing program and the control of fraud.
3. Monitoring fraud prevention programs and control
For a high-risk areas, managers has to double the control.

When the fraud is detected, the management and obtain management had to discuss the
potential solution to solving the fraud. SAS 99 requires auditors to incorporate unpredictability in the
audit plan. Management can control exist of all fraud, because they has a unique position to prevent the
fraud. The extent of testing in effected by the effective of controls of the requires:
1. Review accounting estimates for biases
2. Evaluate the business rationale for significant unusual transaction
3. Fraudulent financial reporting risk of revenues.