...ASSIGNMENT 1: REVIEW OF BUSINESS FRAUD ABSTRACT Business fraud is a white-collar crime that is increasing at a rapid pace. One case of business fraud dealt with an information breach within Bank of America’s information system. This breach affected over 300 Bank of America customers. Management failed to provide proper security for their information system and the sensitive information of their customers. The following assignment will give detailed specifics about the case, clarify the classification of this particular fraud, and suggest recommendations that can help prevent this fraud from reoccurring. ASSIGNMENT 1: Review of Business Fraud On May 24, 2011, an investigation was in process within the Bank of America organization for potential business fraud. A Bank of America employee had manage to copy the personal information of over 300 of the bank’s customers. The security breach allowed the Bank of America employee to communicate the sensitive information of the customers to a ring of scammers. Customer information compromised included the customers’ names, physical addresses, Social Security numbers, contact numbers, checking account numbers, savings account numbers, routing numbers, driver's license numbers, date of births, email addresses, mother's maiden names, PINs and the balances on their accounts. Scammers used this information to start up credit cards and to spend the money available on the customers’ bank accounts. The leaking of the confidential...
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...Assignment 2: Review of Business Fraud ACC 565 – Accounting Information Systems July 28, 2012 Summary of United States vs. Bo Zhang Bo Zhang, a Chinese computer program, was a contract employee assigned to the Federal Reserve Bank of New York (FRBNY), between May 2011 and August 11, 2011, to work on further developing a specific portion of the Government Wide Accounting program (GWA) source code (FBI, 2012). Mr. Zhang was not a United States citizen and was here on a VISA. The United States had spent approximately $9.5 million to develop the GWA code. The FRBNY was given the task of moving the Government Wide Accounting program, developed to help track the billions of dollars the United States government transfers daily, from an antiquated IBM mainframe computer to the Internet, according to a person familiar with the project (Chicago Tribune, 2012). In the summer of 2011, Zhang stole the GWA Code and, without authorization from FRBNY, copied it onto his hard drive at the FRBNY and an FRBNY-owned external hard drive. He then transferred the code to his private office computer, his home computer, and his personal laptop (FBI, 2012). Zhang used the GWA code to access the government system and submit fraudulent documentation to immigration authorities to help foreign nationals obtain visas to enter and work in the United States. Zhang falsely represented to immigration authorities that certain foreign nationals worked full-time for his...
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...percent of revenues to internal fraud. This may seem like a small percentage but it adds up. That five percent can be the difference between staying afloat or filing bankruptcy. When a company spends time and money to prevent fraud it is far less than running the risk of internal fraud. The most effective way to prevent fraud is to establish a proactive fraud prevention program. It is best if a company seeks the advice from a qualified fraud expert. A successful fraud prevention program requires three elements: education, investigation, and proactive preventative techniques. Most internal frauds are brought to attention from employees, customers, or vendor tips. Employees are the most likely source to provide tips of misconducts. So implementing a company-wide education program is a crucial part of a fraud prevention program (Coenen, 2011). Fraud education should focus on fraud awareness and should be presented to all employees. Investigating fraud is important to a comprehensive fraud prevention program. Although investigations are time consuming and costly the benefits are worth it. Investigations can have deterrent effects on potential thieves. Investigations send a company-wide message that management is aware and looking for fraud. Proactive fraud prevention techniques are the biggest asset in the company’s fraud prevention plan. Proactive fraud prevention techniques should include policies and procedures that aim to detect and prevent fraud. One example is establishing...
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...accounting fraud in small business and narrowing the topic to two main factors that allow the fraud to take place. The presentation will be specifically informational in nature. Once I have finished my presentation, the audience will have a clear understanding of my central idea, which is why limited staff and family trust are reasons that small businesses are victims of accounting fraud. The ideal audience for my presentation would be a meeting of a small business alliance, chamber of commerce, entrepreneur club, and any other group or class that would benefit from learning about accounting fraud in small businesses. My topic would benefit a more specific group of people such as those that are interested in or work in the field of accounting or business. Since my intended audience are adults that are working in the field of accounting or business or have an interest in these fields; my topic is appropriate for the age range, interests and general knowledge of my audience. The importance of my presentation to the audience is significant since the individuals in the intended audience will be either working or interested in business or accounting and quite possibly be involved in a small business at some level. It will be important for them to know about the reasons small businesses are the most common victims of accounting fraud. Once informed about the reasons, they will be able to apply what they have learned from my presentation towards identifying possible fraud in the small...
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...------------------------------------------------- ASSESSMENT To be filled by facilitator Components | Scores | Scores | | 1 mark | 2 marks | 3 marks | 4 marks | | Completeness of case chart | Case chart is incomplete | Some of the case chart requirements are met satisfactorily. | Most of the case chart requirements are met satisfactorily. | All case chart requirements is met satisfactorily. | | Submission | On-time submission | N/A | N/A | N/A | | TOTAL | | Case analysis STAGE 1 Issues Explain the main issues underlying the case. Place extra attention on the what, why and when. Main issue regarding to the Flat Cargo Berhad is consist of few factor, the main issue face by Flat Cargo Berhad, accounting fraud, found that Flat Cargo Berhad (FCB) was involved in fraud, this matter will bring great impact to the accounting profession of Malaysia and the public confidence towards the profession will collapse similar to the case of Enron that is revealed in the year of 2001 from the pressure which regard to sustain in the industry leader in Malaysia air cargo carrier and maintain reputation of FCB under the international crisis in oil. Opportunities, for the poor internal control, which poor audit committee which affected independence. Rationalization is about justify to achieve earning expectation and maintain as reputable company. Another factor is regarding to the problematic audit committee from Mr. Ahmad Bin Ali which is non-independence executive director and incompetence...
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...to each content area. This document also lists the topics, the level of competence for each topic, and the related learning objectives and competencies. The learning objectives have been designed to ensure that the competencies are met. In addition, information is provided on the proportion of each question type presented in the examination (that is, multiple choice, quantitative problems, and so on). Use Candidates should use the examination blueprint to prepare for the course examination. The blueprint may not include all the topics listed in the course materials; however, candidates are still responsible for acquiring a broad-based knowledge of all topics not listed in the blueprint since these topics will be tested in assignment and review questions. The topics not listed in the blueprint will also provide candidates with a greater depth of understanding of auditing concepts. Examination Objectives The objective of the 4-hour comprehensive examination is to test CGA candidates on the prerequisite knowledge required for advancement into PA1 and PA2, so as to ensure that the candidates have the broad-based knowledge in assurance needed to function properly in the association’s capstone courses. Examination Guidelines for Questions i) Question Type The following are guidelines on the type of questions and their approximate weightings: Percentage Weighting 20-30% 70-80% Question Item Multiple-choice questions Short-answer and/or short case-type problems and/or a longer...
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...to each content area. This document also lists the topics, the level of competence for each topic, and the related learning objectives and competencies. The learning objectives have been designed to ensure that the competencies are met. In addition, information is provided on the proportion of each question type presented in the examination (that is, multiple choice, quantitative problems, and so on). Use Candidates should use the examination blueprint to prepare for the course examination. The blueprint may not include all the topics listed in the course materials; however, candidates are still responsible for acquiring a broad-based knowledge of all topics not listed in the blueprint since these topics will be tested in assignment and review questions. The topics not listed in the blueprint will also provide candidates with a greater depth of understanding of auditing concepts. Examination Objectives The objective of the 4-hour comprehensive examination is to test CGA candidates on the prerequisite knowledge required for advancement into PA1 and PA2, so as to ensure that the candidates have the broad-based knowledge in assurance needed to function properly in the association’s capstone courses. Examination Guidelines for Questions i) Question Type The following are guidelines on the type of questions and their approximate weightings: Percentage Weighting 20-30% 70-80% Question Item Multiple-choice questions Short-answer and/or short case-type problems and/or a longer...
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...Financial Statement Fraud ACCT 710: Assignment 6-2 Shannon Baxley David Welch September 24, 2011 Table of Contents Abstract………………………………………………………………………………………3 Introduction…………………………………………………………………………………..3 Literature Reviews……………………………………………………………………………5 Conclusion…………………………………………………………………………………..16 References…………………………………………………………………………………...18 Abstract This paper describes financial statement fraud (FSF) and how it may occur within companies. The reason of this study was to research FSF detection and prevention. Research was also done to determine any influences that SAS (Statement on Auditing Standards) No. 82 and SAS No. 99 had on audit programs and the analysis from external auditors. Thirteen scholarly journals were reviewed in order to analyze SAS No. 82 and No. 99 and to show ways to detect and prevent fraud. Results found that managers and/or auditors can create fraud intentionally and unintentionally. There are ways to prevent fraud and educating managers and/or auditors is a good way to make sure fraud does not occur. Introduction Financial statement fraud (FSF) involves the premeditated issuing of phony information on a financial statement (financial statement fraud, 2011). FSF occurs when a company exaggerates assets or revenue, or when it devalues liabilities and expenses (financial statement fraud, 2011). The American Institute of Certified Public Accountants or AICPA defines fraudulent financial reporting as “intentional misstatements or omissions...
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...Iss. 4; pg. 59, 5 pgs Abstract: SEC Chairman Arthur Levitt decried what he termed "accounting hocus-pocus" and called for coordinated efforts to uncover it. He targeted the practice by some companies of improperly boosting reported earnings by manipulating the recognition of revenue. Among the most common methods of doing this are the bill-and-hold transaction and a long list of sham transaction involving shipping, billing and/or related-party involvements. Both the SEC and the AICPA seek to increase independent auditors' awareness of problems associated with these practices. Full Text: | Copyright American Institute of Certified Public Accountants Oct 1999 | [Headnote] Where there's revenue-recognition deviation, there could be fraud. SEC Chairman Arthur Levitt decried what he termed "accounting hocus-pocus" and called for coordinated efforts to uncover it. He targeted the practice by some companies of improperly boosting reported earnings by manipulating the recognition of revenue. Among the most common methods of doing this are the bill-and-hold transaction and a long list of sham transactions involving shipping, billing and/or related-party involvements. Both the SEC and the AICPA seek to increase independent auditors' awareness of problems associated with these practices. Public companies feel pressure to report quarterly earnings that meet or exceed analysts' expectations-after all, failure to meet those expectations can hurt companies' stock prices. This pressure...
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...factors for a business or individual. Accountants are primarily employed to track the flow of money through an organization. In some cases, they are charged with ensuring legal compliance. In others, they are more specialized in optimizing that cash flow. Accountants also organize and aggregate financial information and produce reports for people less experienced in the discipline. (Source: Purpose of Accounting | eHow.comhttp://www.ehow.com/about_4679149_purpose-accounting_.html#ixzz22YwT2kpu ) The accounting system for your business consists of several types of records. Although there are many types of underlying financial records, such as invoices, journals, and receipts, the major accounting records are types of financial statements that summate the financial status of a business. Each type of accounting record details certain information about your business, and each is used for a different purpose, but each type is also linked to another record in your set of financial statements. Although modern accounting software creates these statements automatically based on transactions you enter, it’s still important to understand how each type of accounting record is used. Income Statement The income statement lists all your business income and expense transactions. It is also known as a profit and loss statement. This type of accounting record is used to measure the profitability of your business. Income statements can be generated for any specific business period, and are...
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...obtained evidence in order to draw reasonableconclusions on which to base the audit opinion. However, theseevidences are subject to limitations due to factors not controlled by theauditors. First limitation of the evidence is its insufficiency to supportthe occurrence, reliability and relevance of events and transactions.Mere paperwork is not enough to prove an event to have existed. Italso needs inquiries from people accountable in recording orrecognizing such events. Moreover, there’s a risk in being dependenton evidences provided by the management itself. Auditors should askcooperation from the third parties in order to verify all records. Secondlimitation is the rules implemented by the client which prohibit auditorsto further inspect or review the financial standing of the company.Some clients make some arrangements with the auditors as to howwide their scope in auditing would be. As a result, auditors fail touncover misstatements or manipulations in the financial statements. Third limitation is the consideration of the relationship between thecost of obtaining audit evidence and the usefulness of the informationobtained. There’s a tradeoff between those two things that...
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...include discussion regarding the relationship between the skill and its application to business operations. A study conducted by two professors from Rider College interviewed over 150 lawyers, Certified Public Accountants (CPAs) and accounting educators. The study identified sixteen skills needed by forensic accountants. According to the study, the five most important skills are analytical skills, basic accounting skills, problem solving skills, data analysis skills and interviewing skills (McMullen & Sanchez, 2010). Forensic accountants need analytical skills because as they review financial reports and other source documents, they need to analyze the validity of each transaction and determine if the company recorded the transaction fairly. The forensic accountant needs the ability to analyze where the data came from and whether the data accurately reflects the numbers posted in the financial reports (McIntosh, n.d.). With an in house forensic accountant, this will ensure the company’s financial state is accurately reflected while an independent forensic accountant can verify the accuracy of the reports, both of which help investors determine if the company is worth investing in. “Accounting is widely regarded as the language of business” (McMullen and Sanchez, 2010, pg.1). As such, the need for basic accounting skills is self-evident, for a forensic accountant to be able to review financial reports and other source documents he needs to have an understanding of basic...
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...Markopolos has told his nine years of warnings to SEC officials without making any action. * Oct. 2, 2009.Jeffrey Picower, one of the greatest beneficiaries of the scheme, was found dead at the bottom of his pool. According to the autopsy report, he suffered a massive heart attack while in the swimming pool resulting in accidental drowning * December 12, 2010.Mark Madoff, son of Bernard Madoff, committed suicide and was found dead in the living room of his apartment. According to his friends, he was hopeless of the burden he had to carry which made it difficult for him to rebuild his life. * June 29, 2012. Peter Madoff, brother of Bernard Madoff pleaded guilty of fraud and was sentenced 10 years of imprisonment. He confessed that he his actions paved way for his brother to continue his business. * September 3, 2014. Andrew Madoff, son of Bernard Madoff died of mantle cell lymphoma. Andrew together with his brother were the ones who told the authorities about their father’s fraudulent activities. * March 6, 2015. David G Friehling, auditor who rubber stamped Bernard L Madoff's Ponzi scheme, was sentenced to a year of home detention and an additional year of supervised release. * August 12,2015. Irving Picard, the court-appointed trustee in the Madoff case, has reported these recent developments: * We have recovered or entered into agreements to recover approximately $10.895 billion; 100 percent of the recoveries will ultimately be allocated to the...
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...Licensed to: iChapters User Licensed to: iChapters User Fraud Examination, Fourth Edition W. Steve Albrecht Chad O. Albrecht Conan C. Albrecht Mark F. Zimbelman VP/Editorial Director: Jack W. Calhoun Editor-in-Chief: Rob Dewey Sr. Acquisitions Editor: Matt Filimonov Associate Developmental Editor: Julie Warwick Editorial Assistant: Ann Mazzaro Marketing Manager: Natalie Livingston Marketing Coordinator: Nicole Parsons Content Project Management: PreMediaGlobal Sr. Manufacturing Buyer: Doug Wilke Production House/Compositor: PreMediaGlobal © 2012, 2009 South-Western, Cengage Learning ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored, or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, Web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher. For product information and technology assistance, contact us at Cengage Learning Customer & Sales Support, 1-800-354-9706. For permission to use material from this text or product, submit all requests online at www.cengage.com/permissions Further permissions questions can be e-mailed to permissionrequest@cengage.com Library of Congress Control Number: 2010940986 ISBN-13:...
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...of Power in Financial Statement Fraud Schemes Chad Albrecht • Daniel Holland • Ricardo Malaguen˜o • Simon Dolan • Shay Tzafrir Received: 24 June 2011 / Accepted: 12 December 2013 Springer Science+Business Media Dordrecht 2014 Abstract In this paper, we investigate a large-scale financial statement fraud to better understand the process by which individuals are recruited to participate in financial statement fraud schemes. The case reveals that perpetrators often use power to recruit others to participate in fraudulent acts. To illustrate how power is used, we propose a model, based upon the classical French and Raven taxonomy of power, that explains how one individual influences another individual to participate in financial statement fraud. We also provide propositions for future research. Keywords Financial statement fraud Organizational corruption Recruitment Collusion Power and influence Introduction In recent years, fraud and other forms of unethical behavior in organizations have received significant attention in the business ethics literature (Uddin and Gillet 2002; Elias 2002; Rockness and Rockness 2005; Robison and Santore 2011), investment circles (Pujas 2003; Albrecht et al. 2011), and regulator communities (Farber 2005; Ferrell and Ferrell 2011). Scandals at Enron, WorldCom, Xerox, Quest, Tyco, HealthSouth, and other companies created a loss of confidence in the integrity of the American business (Carson 2003) and even caused the...
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