The Corporate Con Essay

1103 Words5 Pages
Courtney Newcomer
Professor Poirier
Acct 3040
November 2, 2011

The Corporate Con: The Internal Fraud and The Auditor In the movie the Corporate Con: The Internal Fraud and the Auditor there were several different people who seemed like your everyday "Joe," but were actually criminals who committed fraud. Some of the frauds committed in this movie were: Cash Fraud, Accounts Receivable Fraud, Expense Fraud, purchasing fraud, and corruption. Focusing on two individuals Pam and John, each of these criminals committed either cash or accounts receivable fraud. Pam was a graduate from high school who found work soon after graduation. She felt she wasn't getting paid enough for her work so she started stealing cash from the
…show more content…
There are several methods used in detecting cash fraud which are usually included in most cash audits. Some of the methods used are: Bank reconciliations, cutt-off statements, surprise cash counts, customer complaints, altered or missing documentation, journal entry review, review and analyses of decreases in gross sales or increases in returns and allowances, and analytical reviews. The method used in detecting Pam's fraud was a surprise cash count.

Surprise cash counts often bring up situations of employees "borrowing" money or floating small loans also called "swapping." It is crucial that when doing surprise cash counts that it be done often but on an irregular and unannounced basis. Also, if employee checks are included in the cash drawer or register, this may be an indicator that employees are "swapping" checks for cash.

In the prevention of cash frauds it is important to have a segregation of duties. Cash fraud is more likely to happen if one person has control over the entire accounting transaction. Each of the following duties and responsibilities should be segregated: cash receipts, bank deposits, bank reconciliations, and cash disbursements. If one person has the ability to do all of these themselves there is a high risk that fraud can and will occur.

Surprise cash counts are very useful in fraud prevention if the method is used correctly. Employees should know that cash will be counted, but that its sporadic and
Get Access