Integrated Cases Chapter 5

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CHAPTER 5: Integrative Case- Northwest Industries N Date: December 3, 2011 Information Management Immediate Issues or Problems * Is there an existing fraud in the payroll system of Northwest Industries? * What courses of action should be done by Northwest Industries to prevent and detect fraud? Basic Issues or Associated Issues * All of the 1,500 company employees of Northwest Industries had a discrepancy between their reported withholding and the actual amount withheld. * The W-2 of Don Hawkins, a programmer in charge of the payroll system, showed that thousands of dollars more in withholdings had been reported to the IRS than had been withheld from his paycheck * What are the factors that…show more content…
* Train employees in fraud awareness, security measures and ethical issues Fraud awareness training is one of the main tenets of a fraud strategy. Educating staff in respect of what to look for and how fraud happens empowers them to take the necessary action to mitigate the risk of it occurring or, when it does occur, address it in the correct way. All staff benefit from fraud awareness training. The more staff that are educated, the more eyes and ears you have to protect the organization’s assets. Organizations should regularly communicate to staff a clear definition of the types of behavior that constitute fraud or corruption, the fraud detection measures that are in place and an unequivocal statement that fraud and corruption within the organization will not be tolerated. The primary purpose of fraud training is to assist in the prevention and control of fraud by raising the general level of awareness amongst all employees. Recommendations and Implementation: I am recommending to improve the internal control and train employees in fraud awareness. Improving internal control can be done by developing a strong system of internal controls that implement a proper segregation of duties between systems function. They should also require transactions and activities to be authorized by appropriate supervisory and have the system authenticate the person, and their right to perform the transaction before allowing transaction to take place. They should have
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