Maxwell Case Revised Essay

1796 WordsMar 25, 20158 Pages
1) Anna Thomas committed a fraudulent act by making personal charges and cash withdrawals on Rusher Automotive’s credit card. The accounting profession believes there are three conditions necessary for fraudulent behavior. (See Statement on Auditing Standards No. 99, Consideration of Fraud in a Financial Statement Audit. For additional explanation, you may want to review Buckhoff [2001].) a) List the three elements and discuss how each of these elements is present in Anna Thomas’ fraud at Rusher Automotive. Element of Pressure demonstrated through financial pressures, vice pressures, and work-related pressures. “The first leg of the fraud triangle represents pressure. This is what motivates the crime in the first place. The individual…show more content…
A specific example of this is with the Craftset assignment. On the Maxwell & Co. side of the Craftset assignment, there was more than one accountant assigned to the client, and there was a Senior accountant who provided supervision. Therefore, there was some segregation of duties and a senior member of the firm to verify that all work is being done correctly. With no room to wiggle, she did just enough to be able to keep focus on Rusher. On the Craftset side of things, the owners ran a tight ship. They had several layers of control in place. They limited access to their computer system, had physical controls in place, and increased their supervision where their controls were the weakest, segregation of duties. With all these controls, on both sides of the board, in place Anna was not given the opportunity to commit the fraud, so she didn’t. Instead, she did the work she had to do and then kept her focus where she was able to commit fraud the easiest. c) Why had other Max & Co. accountants, specifically Kate Conrad, not perpetuated fraud at Rusher prior to Anna’s hiring? Kate Conrad did not perpetuate fraud at Rusher because she did not exhibit any factors that would lead her to commit occupational fraud. Kate Conrad had a large inheritance therefore no pressure or rationalization was needed for her to commit fraud. Anna had
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