Internal Fraud Case Study Essay

In this case, there are several conspirators who is involved in the fraud receiving punishment from either SEC or federal government. Robert Levin, the AMRE executive and major stockholder, and Dennie D.Brown, the company’s chief accounting officer, were subject to the punishment in the form of a huge amount of fine by the SEC and the federal government. This punishment came from reasons. After AMRE going public, the company have the obligation to publish its financial reports but its performance did not meet expectation. The investigation by SEC shows that Robert took the first step of this scam, fearing the sharp drop of AMRE’s stock price because of the poor performance of company. He abetted Brown, to practice three main schemes to present a false appearance of profitable and pleasant financial reports. Firstly, they instructed Walter W.Richardson, the company’s vice president of data processing, to enter fictitious unset leads in the lead bank and they originally deferred the advertising cost mutiplying “cost per lead” and “unset leads” amount, so that they deferred a portion of its advertising costs in an asset account. The capitalizing of advertising expenses allowed them to inflate the net income for the first quarter of fiscal 1988. Secondly, at the end of the third and fourth quarters of fiscal 1988, they added fictitious inventory to AMRE’s ending inventory records, and prepared bogus inventory count sheets for the auditors. Thirdly, they overstated the percentage

Appendix A.2 also lists several factors that could provide opportunities for management/employees to commit fraud. One factor that could lead to fraud is if, “There is ineffective monitoring of management as a result of: domination of management by a single person or small group without compensating controls.” The auditors should have taken notice of the lack of controls and segregation of duties with respect to Phar-Mor’s

On 09/07/2016, I spoke with Janna Rolfe in the Pasco Sheriff`s Office District II Lobby in reference to a Fraud, Other Jurisdiction.

Werle used Digital Analysis technique to uncover this fraud. She conducted computerized analytical review. She also conducted in depth research to investigate irregular activities and contracts that could have been entered in to by

Garcia and Licata took a number of old invoices and issued checks in the invoice amount, subsequently cashing the checks and splitting the amount between themselves. DeLoach soon after joined them and deposited a number of checks, issued by Licata, into various personal accounts throughout Miami. DeLoach used the funds from the fraudulent checks to write checks to Garcia and Licata (Barnett, 2007).

The amount listed is the enrollment agreement was 10,020.00 which gives a difference of :

In fraud committed against organizations, the victim of fraud is the employee’s organization. In frauds committed on behalf of an organization, executives usually are involved in some type of financial statement fraud; typically, to make the company’s reported financial results appear better than they actually are. In this second case, the victims are investors in the company’s stock. A third way to classify frauds is via the use of the ACFE’s occupational fraud definition, “the use of one’s occupation for personnel enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets” (ACFE, 2010). The ACFE includes three major categories of occupational fraud: asset misappropriations involves the theft or misuse of the organization’s assets, corruption involves the wrongful use of influence in a business transaction in order to procure benefits contrary to their duty to their employer, and fraudulent financial statements involving falsification of an organization’s financial statements for personal gain.

This subject company in this case study is WoolEx Mills. The top management team at the Mills had to act fast to prevent the accusations charged upon them, so that they may venture deep into the United States market. In the process, they had to act in a way that will present the company’s financial statements; cash flows in a way that they did not show any suspicious fraudulent activities. The type of fraud in this case study is known as manipulation of accounts which involves the act of offering the accounts in the way they are not in reality.

Many organizations have been in the news over the past few years due to accounting ethical breaches that have affected their customers, employees, and the general public. I searched the Internet to locate a story in the news that depicts an accounting ethical breach. I selected Krispy Kreme. I enjoy their hot donuts and was curious to learn more about how they played with the numbers. For some reason I always want to dig into the trickery behind the manipulation of financial statements.

James Guisti, a trusted 14-year employee and the manager of an office of Greater Providence Deposit & Trust (GPD&T) was caught embezzling after his superior received an anonymous tip. James was abusing his power in the bank and taking advantage of his loan signing limit to write small loans for several unknowing or fake individuals. All of the loans were between $10,000 and $63,500 and were 90-day notes that did not require any type of collateral to secure them. James was then instructing other trusting employees of the bank to cosign the checks and cash the loan funds. Due to inefficiencies in bank policy, and the fact that the loans were small, the audit team was unable to detect the fraud. Also, in order to avoid being caught for unpaid loans, when the loans would mature James would take out new loans to pay off the old loans.

In this article, Bobbie Jean Donnelly was a fraudster who used Travel and Expense reimbursements to defraud her company. Donnelly figured out how to manipulate her travel and expense reimbursements to eventually defraud her company of about $275,000. Had her company had proper controls in place for travel and expense reimbursements, wouldn’t have occurred to this magnitude.

Combating fraud in the private sector is a difficult task. Trying to combat fraud in the public sector is daunting. In 1999 15.7% of the American workforce were employed by a government entity (federal, state, and local).[1] Mirroring society, government will have its share of perpetrators. The difference from the private sector is in the scope of the fraud committed, the loss of the public trust, the blaring headlines from news media, and difficulty in making necessary changes to combat the problems.

As requested I have completed an analysis of the accounting fraud case at Computer Associates (CA) in preparation of your speech at the American Accounting Associations annual meeting. I have structured my analysis to correspond to six key questions that arose from the case and Stephen Richards actions while Head of Global Sales at Computer Associates.

The executive director recreated one of our vendor’s invoices and charges thousands of dollars throughout the years. When it comes to the accountant, she used the business credit card to purchase personal things, she also change the numbers on the bank reconciliation, which was done by hand.

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.