Fraud Examination
6th Edition
ISBN: 9781337619677
Author: Albrecht, W. Steve, Chad O., Conan C., Zimbelman, Mark F.
Publisher: Cengage,
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In thinking about overcoming the negative publicity and securities fraud fines related to revenue fraud, some companies succeed and move on, while others fail following the fraud. What forces might influence corporate “survivability” in the face of financial reporting fraud related to revenue?
All companies are vulnerable to fraud, but small businesses are particularly vulnerable. Why do you think this may be the case? What signs of possible fraud may be more pronounced in small businesses when compared to larger ones?
What are the most common approaches that perpetrators use to commit fraudulent financial reporting?
You are asked to be interviewed by a student newspaper regarding the nature of accounting fraud. The reporter says, “As I understand it, asset misappropriations are more likely to be found are more likely to be found in small organizations, but not in larger organizations. On the other hand, fraudulent financial reporting is more likely to be found in larger organizations.” How would you respond to the reporter’s observation?
The fraud triangle identifies incentives, opportunities, and rationalizations as the three elements associated with most frauds. Describe how each of these elements is necessary for fraud to occur.
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- Gladys is in charge of receiving all customer payments, recording the payments, and depositing them at the bank. What element of the fraud triangle is best described here? Group of answer choices Opportunity Rationalization Incentive/Pressure Attribution Gladys has large amounts of student loan debt and a crippling gambling habit. She works part-time job in another city. What element of the fraud triangle is best described here? Group of answer choices Opportunity Fraudy fraud Pressure/incentive Rationalizationarrow_forwardResearch has shown that situational pressures and opportunity are factors that contribute to fraudulent behavior. a. Identify two situational pressures in a public company that would increase the likelihood of fraud. b. Identify three opportunity situations that would increase the likelihood of fraud.arrow_forwardJohn Doe, a fraud examiner, has been hired by ABC Corporation to investigate a shortage of cash, which management thinks is being caused by fraudulent behavior. John Doe could spend his time and money pursuing witnesses to the crime or collecting documents that would confirm fraudulent activities. As with most fraud examiners, he chooses to collect supporting documents instead of pursuing witnesses. Explain why John and most other fraud examiners prefer documents over witnesses; then describe elements of good document care.arrow_forward
- The following scenarios are taken from actual fraud cases. For each scenario, categorize as primarily indicating (A) An incentive to commit fraud (B) An opportunity to commit fraud or (C) a rationalization for committing fraud. State your reason for your answer in each scenario. 1. Top management of the company closely guards internal financial information, to the extent that even some employees on a "need to know basis" are denied full access.arrow_forwardOutline two positive and two negative consequences that this might pose to the company in future fraud preventionarrow_forwardWhich of the following is NOT a trend in Corporate Fraud? a) Anti-fraud controls have little impact on reduced fraud losses and shorter fraud duration b) Tips are consistently the most common detection method c) Banking, financial services, government/public administration and manufacturing have the greatest number of fraud cases reportedarrow_forward
- if a manager is incharge of the Credit Right Software Corp department which involves sells leading account sooftare product and two of his employess commited fraud. How should the manager prepare himself to understand what causes individuals to commit fraud and how it happens?arrow_forwardAnswer the following based on the image of the scenario A-Help management understand the issue from Jack’s perspective. Describe the ethical dilemma that Jack faces. What is the issue? Who are the parties involved? If you were Jack, what would you consider when making a decision? B-Help management understand the elements of the fraud triangle in this situation which increase the chances of fraud. Why is this fraud? What are the opportunities, motivations and rationalizations that you see? How does this affect the business financially? C-Help management come up with a plan to minimize the likelihood of this happening in the future. Be sure to mention specific components of the COSO framework.arrow_forwardAllison Everhart, an employee in accounts payable, believes she can run a fictitious invoice through the accounts payable system and collect the money. She knows payments are subject to an audit. Which account would be the best place to hide the fraud?a. Inventory.b. Wage expense.c. Consulting service expense.d. Property tax expense.arrow_forward
- “Organizations are encouraged to take every precaution possible to protect their information systems so that potential for fraud and any resulting losses can be significantly minimized.” Required: Critically explain any three motives behind the cheque fraud scheme. What to do if someone has deposited a fake cheque into your bank account?arrow_forwardWhich of the following scenarios reduces the risk of an employee fraud? Group of answer choices An accountant being responsible for approving payments to a vendor The bank reconciliation being prepared by an accountant Remittance advices being sent directly to the cashier A sales clerk having access to the cash registerarrow_forwardAs a fraud investigator, why you should be concerned about fraud trials as a result of resolving a fraud investigation case?arrow_forward
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