Payroll Fraud Case

Depending on the severity of the fraud, the appropriate response can be different from firm to firm. A good way to detect fraud would be to listen to information provided by a disgruntled employee. This holds true unless the employee was disgruntled before the fraud occurred. The information will probably be false and misleading because the employee has held animosity for a while. Regardless, you should take the information seriously when it is first presented to you.

The one pattern within the data that appears to be inconsistent yet if the auditors had established an internal control systems would be Monus the founder moving so freely throughout every aspect of the company with no one checking his movements. From choosing what properties to purchase to purchasing supplies. In any company there should be segregation of duties. For example, the person making the deposits should not be the person writing the checks. Had there been stipulations made it would not have been so convenient to commit the

Getting an internal auditor into the government office was a great move on their part. We can now move forward in this case as we have established that fraud is taking place. The next steps that could be made it to pay close attention to the employees. Any suspicious behavior, such as a sudden eager to work till late at night, or even noticing bad habits like gambling or drug problems could lead someone to steal. Another way to aid against fraud is to control and intensify the paper trail. Make it difficult to be able to get away with cash without recording it and clearing it with someone

I’d suggest to her to have her employees trained for the prevention and detection of fraud and give her the important internal control needed to prevent and detect fraud. The preventive control would be to have segregation of duties or dual custody to ensure that everything is accurately recorded and presented, another is she should implement a system of authorization to verify all transactions, inflows and outflows of cash, are recorded properly and have physical safeguards and not have one employee have unlimited access to everything as this will probably lead to theft and manipulation of data. For her detective controls, the organization should have independent checks to see if there is any suspicious activities or information found within the company and lastly, she must have documents and records of everything as this will be used as evidence when fraud is detected. (Albrecht et. al 2014, p.

The following events led up to the reported incident. First, an attacker spoofed his IP address to eavesdrop on the network to find the finance and HR information systems. Second, the employee hacked into the HR database and increased his salary in the records system. This resulted in the employee receiving two paychecks with the altered amounts. Third, the employee sniffed the network to intercept and alter emails about the checks between an auditor and management. Fourth, the employee impersonated a person who has access to financial records to gain more access to other financial records. Finally, the employee decreased the company President’s paycheck while increasing his paycheck by

There are various procedures that could be taken in to account that would, if properly implemented, would have detected the frauds that occurred within the companies. There are many control risks that should have been taking regarding inventory along with preliminary audit strategies for the inventory and substantive test to be done that would have raised many flags during the typical audits as well as in depth ones.

The manipulation of accounts fraud scheme is generally fulfilled by employees in top management positions and it usually involves making understatements or overstatements on financial statements making it very hard to detect. The process followed as Troy Adkins, (2015) explains is very simple. The financial statements are either overstated to show different figures in the earnings on the income statements making them look better than they actually are or the earnings in the current periods are manipulated in such a way that the revenue is understated or they inflate the current year’s expenses. The second process includes making the financial statements look worse than they are in reality. Deloitte, (2009) explains a number of ways which the accounts are manipulated where as one of the ways is to manipulate the reported earnings directly. They further explained that overstating the

There could be many reasons why the perpetrator had an opportunity to hide the fraud. It is clear that the internal control system is weak at Larson's Cement. In order for them to properly protect their assets it is important that the signing of checks and the management of bank accounts not be performed by the same individual. While Betty Landrone is the treasurer and the person keeping the checkbook, she shouldn’t supervise and handles the credit approvals, bill payments and collections. Having all these responsibilities assigned to Betty would give her an opportunity to create a dummy vendor. There is a conflict of responsibilities under this scenario and should be separated. Separating the duties among different people will minimize the

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

As the WMI accounting fraud case shows, change exposes organizations to considerable financial fraud risks. The top officials used acquisitions and merger as means to perpetuate this fraud. This financial fraud took place due to the organizational breakdown of internal and external audit controls. As a result, the top management was able to commit this massive fraud without facing any resistance. It never occurred to them that they were violating the law because what mattered to them was pocketing as much as they could.

* Obtained, reviewed, and analyzed financial documents of Tallahassee BeanCounters including ledgers, purchase orders, invoices, purchase records, and salary information

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,

A business can not work out without an account system, which includes internal. Internal controls are used by companies to make sure financial information is accurate and valid. Strong internal controls are signs of a financially healthy company and protect the company’s integrity. Strong internal controls can also increase a company’s profitability. There are several types of internal controls that companies used to protect themselves such as: Segregation of duties, asset purchases, supervisor review, internal audits and adequate documents and records. This paper will discuss several topics from a case study about And the Fraud

Over the past two years, corporate America has endured a plethora of fraudulent acts committed by those of high status within their respective corporations, most of which involve internal fraud. Internal fraud has two main aspects, misappropriation of assets and fraudulent financial reporting, with the focus of this discussion lying within the former. Misappropriation of assets is defined as fraud for personal gain. It is the most common type of fraud found among employees and frequently includes theft of cash and inventory.

IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF BACHELOR OF SCIENCE (B.sc) DEGREE IN ACCOUNTING.