"I Didn't Know!" Why is Fraud Rising in the Church? (1 of 7)

"My people are destroyed for lack of knowledge..." Hosea 4:6 - King James Version

The Church is the place of salvation, healing, deliverance, transformation and deployment of people into his/her giftedness. Many of the people that enter the church doors struggle in various areas of their lives. Some may struggle with stealing, embezzlement, unlawful desires, etc. Helping individuals overcome these issues and engaging them in ministry is one of the hardest challenges faced by local congregations.

In a recent article written by Christianity Today (April 23, 2001) headlined "Jury Convicts Greater Ministries of Fraud," five leaders were convicted in Federal Court on 72 counts of conspiracy, wire and mail fraud, and money laundering, in one of the largest church fraud schemes in American history.

SAS No. 99, Consideration of Fraud in a Financial Statement Audit gives the description of fraud and its characteristics. In order to understand how to prevent fraud, we must first look at what is fraud.

The primary factor that distinguishes fraud from error is whether the underlying action that results in the misstatement of the financial statements is intentional or unintentional.

For purposes of the article, fraud is an intentional act that results in a material misstatement in financial statements that are the subject of an audit (AU Section 316)

So what are the characteristics of fraud? See post #2.