Internal Fraud Case Study Essay - 650 Words

COVER STORY: INTERNAL FRAUD CASE STUDY Prepare a two-to-three page case study report on the following case: COVER STORY: INTERNAL FRAUD on pages 104-106 in Chapter 4: Billing Schemes of the Fraud Examination text by Wells. Discuss the coincidences involved in this case study. Use the 2009 Global Fraud Survey (also located in Doc Sharing) for references concerning perpetrator, size of fraud, detection, and controls. This case is about the $4 million embezzlement fraud by an employee of a magazine publisher, and how the fraud was discovered. The type of fraud discovered was a billing scheme that was found on accident. A billing scheme is, â€Å"Any scheme in which a person causes his employer to issue a payment by submitting invoices for†¦show more content†¦In doing so, they should have had someone else transporting the approved invoices to the accounts payable department. They should have also mailed the checks out to the clients rather than having someone come collect them. According to the 2010 Global Fraud Studies, â€Å"there was a strong correlation between the perpetrator’s position of authority and the losses caused by fraud.† 3 Managers took 41% of the cases. With coincidence two, McGrane’s secretary noticed that Miano’s behavior became extravagant. From him purchasing $800 in drinks, to having 5 cars, one of which was a Mercedes, to him purchasing a 2nd home for $416,000, and him talking about a new $18,000 boat. I think the secretary should have seen it as a red flag when she noticed Miano’s behavior becoming extravagant and reported it to a higher authority. Managers should take the time to analyze the lifestyles of their employees. Unexpected and unexplained changes in lifestyle may suggest that fraud has taken place. I think the activity and responsibilities of this type of employee should be monitored. With coincidence three, a red flag should have been the fact that Miano hadn’t taken a vacation in 4 years. According to the 2010 Global Fraud Studies, â€Å"frauds committed by higher-level perpetrators also took longer to detect.† 4 The median months were 18 months to detect fraud in managers. Then to take a vacation to go gambling isShow MoreRelatedInternal Fraud Case Study642 Words   |  3 PagesCOVER STORY: INTERNAL FRAUD CASE STUDY Prepare a two-to-three page case study report on the following case: COVER STORY: INTERNAL FRAUD on pages 104-106 in Chapter 4: Billing Schemes of the Fraud Examination text by Wells. Discuss the coincidences involved in this case study. Use the 2009 Global Fraud Survey (also located in Doc Sharing) for references concerning perpetrator, size of fraud, detection, and controls. This case is about the $4 million embezzlement fraud by an employee of a magazineRead MoreInternal Control and Fraud Detection in the Banking Industry (a Case Study of Guarantee Trust Bank Plc)11154 Words   |  45 PagesINTERNAL CONTROL AND FRAUD DETECTION IN THE BANKING INDUSTRY (A CASE STUDY OF GUARANTEE TRUST BANK PLC) BY OGUNDELE GBONJUBOLA 06271184 BEING A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF ACCOUNTING, FACULTY OF MANAGEMENT SCIENCES, UNIVERSITY OF ABUJA, ABUJA, NIGERIA IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF BACHELOR OF SCIENCE (B.SC) HONOURS DEGREE IN ACCOUNTING JANUARY, 2011 DECLARATION Apart from references of other people’sRead MoreThe Role of Internal Audit in Prevention of Fraud in Nigeria Banks . a Case Study of Equitorial Bank Lagos.9955 Words   |  40 PagesBackground of the Study 2. Statement of Problem 3. Research Objectives 4. Significance of Study 5. Scope and Limitation of the Study CHAPTER TWO: LITERATURE REVIEW 1. Introduction 2. Types of Bank Frauds 3. Causes of Fraud 4. Effects of Fraud on Banks 5. Internal Audit function 6. Fraud and Internal Audit 7. Fraud Prevention 1. General Measures 2. Specific Preventive Measures 8. Elements of Fraud Auditing 9. Measures of Controlling Fraud in Banks 10. StatementRead MoreComparative Analysis Of Fair Value And Historical Cost Accounting On Reported Profit1659 Words   |  7 PagesTitle: Comparative Analysis Of Fair Value And Historical Cost Accounting On Reported Profit: A Study Of Selected Manufacturing Companies In Nigeria. (BESSONG, 2012) Study the importance of historical value and fair value cost accounting on reported profit. The study discussed how fair value accounting and historical cost accounting will have effect on the reported profit. However it is said that key objective of any business is to earn profit and it is also equally important to report the profitRead MoreCase Study 1 Fraud Essay1128 Words   |  5 PagesCase Study1: And the Fraud Continues 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 controlsRead MoreDonald R. Cressey s Theory Of The Occupational Offender1163 Words   |  5 Pagespoint, they started embezzling from their employer (Wells, 2013, p. 13). Cressey’s hypothesis was that embezzlers or â€Å"trust violators† had three common characteristics (Wells, 2013, p. 13). These three characteristics would later become known as the â€Å"fraud triangle† (Wells, 2013, p. 13). Frist, the trust violator had to have a â€Å"non-shareable financial problem† (Wells, 2013, p. 13). A non-sharable financial problem was a problem that the embezzler, for whatever reason, wouldn’t share with someone elseRead MoreUmmary Of The Issues In The DHB Industries990 Words   |  4 PagesIndustries, Inc. case study.    Background: DHB Industries, Inc. (DHBI) case study concerns an accounting and financial reporting fraud. DHBI made protective body armour for the US military. The former CEO of DHBI, David Brooks (DB), misrepresented DHBIs financial statements, mislead the independent auditors in order to conceal his fraudulent transactions and he misappropriated DHBIs assets and funds for personal expenditures. Main Issues: (1)  Weak corporate governance and lack of internal accountingRead MoreInternal Control Of Nigerian Banking Sector1323 Words   |  6 PagesDISCUSSION This section of this chapter aims to interpret the findings and critically evaluate the study. This research indicates that internal control can prevent and detect fraud in Nigerian banking sectors. The first section of the findings contains the first objectives of this research which is to find out the employee knowledge based on the concept of fraud in banking sector. Therefore, According Biegelman, Martin T, (2013) said The penchant for extortion happens when three basic componentsRead MoreWeek1 Assignment Essay893 Words   |  4 Pagesï » ¿Visit the websites for the Institute of Internal Auditor and the Association of Certified Fraud Examiners: http://www.theiia.org http://www.acfe.com In particular, read the code of ethics for both organizations at: http://www.theiia.org/guidance/additional-resources/ippf-processes/ http://www.acfe.com/about/cfe-rules.asp?copy=ethics 1. How do the codes complement each other? 2. Provide three other notable points of information from each site that either you learned for the first time or have foundRead MoreA Report On Occupational Fraud Essay1433 Words   |  6 Pages B Detection The 2014 ACFE Report on Occupational Fraud expressed that the longer frauds were able to go undetected, the more costly they became. One-quarter of the frauds in the study were detected in the first six months of their occurrence; and for those cases, the median loss was limited to $50,000. This is a more acceptable figure, considering that, the general median loss caused by frauds in the study was $145,000. Hence, we can see that early detection can prove to be less financially