Red Flags ( Risks )

* “They tended to make one large deposit and then withdraw cash in small amounts over time.”

Explain the appropriate field work needed to review high-risk business transactions for cash and revenue?

Professional auditing standards discuss the three key “conditions” that are typically present when a financial fraud occurs and identify a lengthy list of “fraud risk factors.”

As previously identified, there are also “non-legal/extra-governmental” political risks which could bring unexpected upheaval to foreign firms. Macro political risks such as the threat of violence, corruption, war or military coup, political instability and terrorism are all direct threats to foreign investors.

CAS 300 requires auditors to their audit using a risk based model where the nature, timing and extent of audit procedures are based on the assessed risk of material misstatement. Pickett (2006) argues that for audits to be effective and efficient, much of the audit effort should be focused on areas that are considered to pose the highest audit risk. Additional audit procedures should be linked to individual audit assertions whereas other audit procedures need to be performed as and when needed. Thus, for an audit plan to be put in place, it is necessary for an auditor to come up with a risk profile of the client comprising an understanding of the business operating by the audit client, assess business risk and also perform its preliminary analytical review.

An innocent child is standing in a candy store and looking at all his favorite options from which to choose. He slowly reaches for the bag of M&Ms, and he does not know what all the chemicals in that bag will cause him. The M&Ms have ADHD (Attention Deficit Hyperactivity Disorder) causing carcinogens in them called food dyes. These food additives help the food products stay vibrant and eye catching but America’s youth does not know what the consequences are when you eat these products. Children think they are nice and colorful but they do not know what lies behind the wonderful rainbow of colored M&Ms in that bag. That is why The United States needs to ban food color additives to make our nation healthier. The main points on food dyes are the problems they cause, the counter argument against them and the steps the country can take to solve these problems.

many unnecessary risks such as trusting O'Brien, renting the room above Mr. Charrington’s shop and

any new business or development there is always a risk. I also know the Consumer Financial Protection Bureau

a. The risk is associated with the lack of segregation of duties and the potential of the treasurer to authorize the use of funds without any outside review.

Group activities included learning the levels of recovery and relapse, completing the Grief and Loss handout, and discussing steps and skills to use to handle the high-risk situation to prevent relapse. Mr. Fulson moderately participated in the group activities. Reported his cousins were in town for the weekend, which was a high risk situation for him as his cousins are drinking alcohol. He stated that using of forecasting skills to think through the situation before joining them for BBQ. Stated “I asked my mom to help me. I was able to have fun with my cousins without engaging in drinking activity”. PO appeared to be calm and fully communicative throughout the group process.

The risk must be substantial enough that the action represents a gross deviation from what a reasonable law abiding person would do.

Additional concerns have been made in regards to the red flags missed by auditors. First of all, auditors should have been alarmed by the size of the cash account held in the Cayman Islands. Auditors should have remained skeptical about the existence of this account. They should’ve addressed this red flag with

Money laundering has been defined as the process by which criminals attempt to conceal the illicit origin and ownership of the proceeds from their illegal activities. Criminals obtain the money from their illicit activities such as drug trafficking, fraud, etc. From that point forward, three stages are to happen in order for the crime of money laundering to be committed. The first stage is placement. Placement means the cash is deposited into banks. The second stage is layering meaning the funds are moved into other financial institutions to throw off any suspicions of its origins. The final stage is integration which simply means the money is used for legitimate assets such as purchasing a house or investing in stocks and other things of that nature.

Finally, we also observed that the cashier deposits mail receipts in the bank weekly. The internal storage of cash on the premises of the Company is not advisable for obvious reasons- theft, robbery, and unauthorized access. Employees with other intentions can alert external cohorts to raid or rob the Company at night or at another time to gain access to the cash stored on the premises. Additionally, the storage of the cash on the premises presents a "working hazard" for the employees as outsiders wanting to gain access to the cash may subject them to unwanted raids. The use of a bank on a daily basis contributes significantly to good internal control over cash. The company can safeguard the cash on a daily basis by using a bank as a depository and

The business risks for this project could be wasting money on programs that are not very effective, in enhancing employee performance, or