please critique the following discussion and support your response with 3 scholars cited.

DETAILS OF FRAUD

In 2005, a very big multinational insurance corporation was caught for a huge accounting scandal. A massive accounting fraud to the tune of $3.9 billion was alleged, along with bid-rigging and stock price manipulation. AIG fell under scrutiny in 2004 when they received a bid-rigging complaint, at that time the company as a whole was being investigated for misconduct. After the report was released AIG entered into fraudulent loss reserve transfer transaction with the CEO of General Re Corporation, Ron Ferguson, a major player in the scandal.

MAIN PLAYER, HOW HE GOT CAUGHT & PENALTIES HE FACED

Thisfraud of financial reportingwas done by the CEO, Hank Greenberg, who allegedly booked loans as revenues, steered clients to insurers with whom AIG had payoff agreements, and told the traders to inflate stock prices.He was told on by Gordon Massie, Head of Leveraged Finance Group for AIG and the SEC regulator investigations. Greenberg was fired but did not face any criminal charges. However, things settled with the SEC for $10 million in 2003 and $1.64 billion in 2006, with a Louisiana pension fund for $115 million, and with 3 Ohio pension funds for $725 million.

This fraud is known as financial reporting fraud. As stated, 'The main purpose of this type of fraud is to deceive investors and creditors into making favorable decisions towards the company' (Harrison, Horngren, Thomas, Berberich & Seguin, 2015).

PREVENTATIVE MEASURES

1. An outside accountant or a third party should be hired to review financial statements. This can help on reducing the chances of an inside individual creating false entries and covering up their tracks.
2. Internal control programs should be monitored and revised on a consistent basis to ensure they are effective and current with technological and other advances.
3. Certified Fraud Examiners (CFE) or a Certified in Financial Forensics (CFF) can help a company establish antifraud policies and procedures. These professionals can provide a wide range of services from complete internal control audits and forensic analysis to general and basic consultations.
4. AIG should have multiple people review a transaction before entering it. As stated, 'The bigger the transaction, the more specific approval it requires. Very large transactions should generally be approved by top management and the board of directors' (Harrison, Horngren, Thomas, Berberich & Seguin, 2015).

REFERENCES:

Accounting-Degree. (n.d.). The 10 Worst Corporate Accounting Scandals of All Time. Retrieved fromhttp://www.accounting-degree.org/scandals/

Harrison, W.T., Horngren, C.T., Thomas, C.W., Berberich, G. & Seguin, C. (2015).Financial Accounting(5thCanadian ed.). Don Mills, ON: Pearson Canada Inc.

Prezi. (2016, May). American Insurance Group Scandal. Retrieved fromhttps://prezi.com/ntyocad35prn/american-insurance-group-scandal/

Reed,S. (2015, June). Six Strategies for Fraud Prevention in Your Business. Retrieved from http://www.cgteam.com/blog/six-strategies-for-fraud-prevention-in-your-business