A Case Study : Rita Crundwell

Appendix A.2 also lists several factors that could provide opportunities for management/employees to commit fraud. One factor that could lead to fraud is if, “There is ineffective monitoring of management as a result of: domination of management by a single person or small group without compensating controls.” The auditors should have taken notice of the lack of controls and segregation of duties with respect to Phar-Mor’s

Two of the three partners of the firm that performed the audit for the district had 55% ownership in the company that sold the district its financial management software “finance manager”. The partners’ role as vendors violated the general standard of independence under generally accepted government auditing standards. Also the auditors received a commission from the sale of another software called “student manager” and receiving commissions is prohibited by the AICPA. Also there were fundamental problems with their audit planning and efforts to test financial records. The CPA firm work that was so flawed and so far below professional standards that it failed to identify the millions that were stolen.

With different industry definitions and viewpoints, fraud can be a tough issue for audit committee members to grasp for oversight purposes. The legal obligations of audit committee members have intensified because their standard duty of care and loyalty to the entity has increased in light of management fraud activities.

2 Managing fraud risk: The audit committee perspective Fraud in a fi nancial statement audit

The main objective of this investigation is to see if funds are being misappropriated and who is misappropriating these funds. In conducting this investigation we needed to take many steps to ensure that the tip that the department received was true. To begin we checked personnel records and company records to gather information (Albrecht, Albrecht, and Zimbelman, 216) on the suspect, Rita Crundwell. Information such as how long has this suspect has worked in the city, what her position is, and what it entails. We also went through the accounts that she is transferring the cities money into and verified that all of these are all legitimate accounts of the city. If we found any errors or accounts that were not legitimate we would note these down and ask Rita about these accounts during the interview.

Returned call to Ms Deborah Turner. She wanted to complain about a CW worker that did not allowed see her great-niece Astasia (2years old) and great-nephew, Odion (4 years old).

In the Leslie Fay case, the fraud triangle was not critically evaluated prior to the issuance of unqualified audit opinions. Kenia had no incentive to commit fraud – he owned no company stock and did not receive a compensation based incentive. Pomerantz and Polishan had both of the aforementioned items included within their compensation package. Further, due to the lavish lifestyle and overbearing personalities of both Pomerantz’s and Polishan, they also clearly would have had rationalizations and justifications for the fraud. Additionally, given the “tight ship” Polishan ran in the Wilkes-Barre accounting office, Kenia would not have had opportunity – but Polishan would have, especially considering his close friendship with Pomerantz (Knapp, 2011).

Cathy Turner, my mother, is the executive director, president of the board, and the lead therapist at NewSong Counseling Center located in Mt. Sterling, Kentucky. Her duties are extensive because she has so many roles within the organization. Some of these include paying the bills involved with running a business such as rent and utilities and creating clinical reports. As the president of the board she creates the agenda for board meetings and suggests places for growth. Also as lead therapist, Turner selects the treatment plans for all of her clients utilizing evidence-based practices that she researches and implements.

Peggy Bell is a 40-year-old white Caucasian female who presents to the FNP clinic in the company of her elderly mother. Patient is emaciated, has fingers that are severely nicotine stained, smells strongly of alcohol, answers questions in monologues with no eye contact, and appears to be nodding off between coughing episodes. The mother reports that the patient:

The reporting party (RP) stated on Friday October 4 the director Sandra Carroll was observed pulling 17 year old Andrea out of the bathroom by her hair. Later the same day the director slapped Andrea so hard that she fell to the floor. The RP stated after a few hours Andrea began to have seizures. According to the RP Sandra was observed slapping and yelling at resident Brianna. The RP stated when the director is having a bad day or not getting along with her husband she takes it out on the children and the staff persons. The RP stated child Andrea has flea bites to her body (parts not mentioned) and that fleas were observed in the facility. The RP stated the administrator displays her frustrations by hitting and yelling at 12 year old Jacob.

The following project, will address the case of Rita and Christiana C . after concern was provided by a neighbor, who reported that 2 years-old, Christina, seemed underweight, neglected and presented facial bruises. She is cared by her currently unemployed single 19 year old mother, Rita C., in a one bedroom apartment in a lower-income neighborhood of Pleasantville, CA. Under these circumstances, a caseworker was assigned by Child Protective Services to visit the home in order to identify the potential impacts and implications for the developmental growth of Christina C. In order to advise Judge Thompson, this project will focus on providing careful explanations that describe the familial and parental characteristics of the socio-cultural environment that favor the removal of Christina from Rita 's custody, followed by the explanation of why the attachment between the parent and child provide reasons that are against the removal of Rita 's custody of Christina, to end on a recommendation on which course of action will best benefit the child.

The auditing firm has been in engagement with the company throughout the period when the fraud was being committed. One of the common and clear indicators of possible fraud was the company’s cash flow statement. The company experienced positive growth in its profits from the year 1996 through to the year 1998. However, a close analysis of the cash flow statement shows that the company had experienced negative figures of cash flow from both operating and investing activities and positive cash flow from financing activities which would not sufficiently offset the negative cash flows from operating and investing. It is therefore evident

This essay explores the corporate collapse of Harris-Scarfe on April 3 2001, which before their collapse was Australia’s third largest retail group (Buchanan 2004, p. 55). It will explore the collapse in the context of the auditing framework. In particular, how the financial indiscretions were not discovered by the auditors, which were going on as early as six years prior to the collapse (Buchanan 2004, p. 62). To start with, we define what the auditing objective is in order to work out where it failed in this case. ASA 200.11/ISA 200.11 defines the auditing objective as one that needs to ascertain reasonable assurance that the financial report as a whole is free from misstatement, whether due to error or fraud. In doing so the auditor can give an opinion of whether the financial report was prepared in accordance with the financial reporting framework (Gay & Simnett 2012, p. 12).

B) I think the auditors should have equal responsibility for detecting material misstatements due to error and fraud. It’s their job to make sure the financial statements are as accurate as possible. Although it may be hard to check all the information from a company it’s the responsibility of the auditor to sign off that everything is in check.

Fraudulent, erroneous, and illegal acts committed by a public company, usually at a managerial or executive level, have been a very serious problem for many years and have prompted development of strict and updated regulations, such as the Sarbanes-Oxley Act, in an attempt to prevent these occurrences. Unfortunately, these new or updated regulations are not enough to prevent these acts from happening, thus not alleviating the auditors of their responsibility to detect fraud. Some methods that management and auditors can employ to prevent and detect fraud, errors, and illegal acts are: improving knowledge, improving skills,