Fraud is a serious and growing international problem, and can greatly affect a company's performance. The current case highlights the impact that culture can have on corporate corruption through the culture of a specific organization, as well as through the broader culture of a society. In this case, Russian NorthOilService (NOS) acquired 98 percent of the shares of the near-bankrupt Kazakh drilling company, South MunaiGas (SMG) in 2007. NOS management realized that SMG's weak financial standing was caused by corporate fraud and corruption, among other factors. Unfortunately, NOS was unable to prevent the new management team of SMG from committing fraud, despite NOS's anti-fraud efforts after acquisition. This actual case study focuses on the accounting and other frauds perpetrated by the SMG management team and the anticorruption measures implemented by NOS. It addresses fraud, bribery, corruption, and misappropriation of assets through inappropriate procurement procedures, in a cultural environment differing substantially from U.S. corporate contexts. This case is suitable for use in auditing, corporate governance, and fraud examination courses.

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