Case summary:
In the 1990s, Person DK built a security systems company. His deals were based on handshakes and phone calls. Federal prosecutors determined that he is living a lavish lifestyle. He was first indicated on delinquent unpaid sales tax. He went to prison for falsifying record, abusing corporate loan programs, and conspiracy and he was released in the same year.
Due to this kind of financial scandal, companies started showing interest in forensic accounting. Association of Certified Fraud Examiners (ACFE) stated that
To determine: How recent trends in fraud provide new opportunities for CFE.
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Business Essentials (12th Edition) (What's New in Intro to Business)
- 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.arrow_forwardAssuming you are an accountant to a bank, draw up a comprehensive fraud risk assessment that would incorporate a formal process of accountability and responsibility going forward to the bank.arrow_forwardDescribe a company's fraud prevention programme and identify any improvements that might be necessary to prevent embezzlement fraud or at least discover it sooner.arrow_forward
- How was Rita Crundwell able to embezzle nearly $53 million over almost 20 years and what role does the fraud triangle play in allowing people to feel comfortable with engaging in fraud?arrow_forwardhow can we use the fraud triangle to target unethical behaviors in a business environment for the short term and long term?arrow_forwardIn the car insurance market, how can a company convince the unisured to take up insurance?arrow_forward
- What role do auditors play in investor protection, and how can management ensure their independence?arrow_forwardThe text describes three ways to restore solvency to the Social Security trust fund. Which of these do you favor and why? Would you support means testing of Social Security beneficiaries? Why or why not? What suggestions would you offer to encourage people to save privately for retirement? What barriers exist that affect people’s retirement savings, and how would your ideas address those barriers?arrow_forwardThe first step an insurance company should take in establishing an anti-money laundering program is to A) train staff B) ask the US Treasury Department for guidance C) conduct a risk assessment D) obtain suspicious activity reporting formsarrow_forward
- What are some common legal issues that businesses face, such as contract disputes, product liability claims, and employment lawsuits? How can you minimize your risk of being sued and protect your assets in these situations?arrow_forwardWhat motivated the establishment of the Sarbanes-Oxley Act of 2002? What responsibilities are assigned to management under this law? How does this law contribute to the control of financial health in companies?arrow_forward6. One means by which consumers can protect themselves from fraud is by paying close attention to:arrow_forward
- Foundations of Business (MindTap Course List)MarketingISBN:9781337386920Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning