Deceptive Ledger The Harriette Walters Case

In a recent financial fraud case, city employees in Brooklyn, New York, accessed electronic databases to defraud the city of $20 million. Several employees in collusion with the former deputy tax collector completely erased or reduced $13 million in property taxes and $7 million in accrued interest that taxpayers owed. In exchange for this service, the taxpayers paid the employees involved bribes of 10 to 30 percent of their bills. Required Discuss the control techniques that could prevent or detect this fraud.

In a financial fraud case, city employees in Brooklyn, New York, accessed digital databases to defraud the city of $20 million. Several employees, in collusion with the former deputy tax collector, completely erased or reduced $13 million in property taxes and $7 million in accrued interest that taxpayers owed. In exchange for this service, the taxpayers paid the employees involved bribes of 10 to 30 percent of their bills. Required Discuss the control techniques that could prevent or detect this fraud.

Jim Block, CFE, is investigating Randy Smith for his role in a potential kickback scheme. Gathering evidence about Randy's financial activity has been difficult. While on a stakeout at Randy's home, Jim sees Randy's wife take out the garbage and place it on the curb. Jim takes the trash bag, sorts through its contents, and discovers multiple bank statements that provide details about some of Randy's illicit financial transactions. Is jim's acquirement of the bank statements legal even though there was no search warrant? Fully explain!

Assume that Brooke Miles, accounts payable clerk for West Coast Design Inc., stole $48,350 by paying fictitious invoices for goods that were neverreceived. The clerk set up accounts in the names of the fictitious companies and cashed the checks at a local bank. Describe a control procedure thatwould have prevented or detected the fraud.

Rohini works as an accountant with PQR Ltd. She embezzled $20,000 from the company bank account. She was caught in the annual audit of the company. She justified her action saying that her employer has not given any pay rise, so she had to take $20,000 from the account. Explain in your own words the internal control that may have failed in the above situation. Also explain which element of the fraud triangle Rohini is referring to justify her action.

The Perfect Crime? Consider the following story of an actual embezzlement.This was the ingenious embezzler’s scheme: (a) He hired a print shop to print a private stock of Ajax Company checks in the company’s numerical sequence. (b) In his job as an accounts payable clerk at Ajax, he intercepted legitimate checks written by the accounts payable department and signed by the Ajax treasurer and destroyed them. (c) He substituted thesame numbered check from the private stock, payable to himself in the same amount as the legitimate check, and he “signed” it with a rubber stamp that looked enough like the Ajax Company treasurer’s signature to fool the paying bank. (d) He deposited the money in his own bank account. The bank statement reconciler (a different person) was able to agree the check numbers and amounts listed in the cleared items in the bank statement to the recorded cash disbursement (check number and amount) and thus did not notice the embezzler’s scheme.The embezzler was able to…

What is a good response to.... Embezzlement is a type of fraud that happens when someone within an organization misuses their position of trust to steal money. This breach of trust is an intentional form of deceit to misappropriately utilize these funds for their own gain. Reviewing sales, refunds, returns, cash deposits, and voided transactions would help identify any form of fraud as an assistant manager. If there are any discrepancies identified, it would help to review logs of who accessed software at specific times to help identify the culprit. If there was something identified the next step would be to reports the findings to higher management depending on company protocol and be a confidant during the investigation process. It is not advisable to have direct confrontation as it could lead to further deceitful actions with the intent to cover up their actions.

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?