Final Project

profileacruzma
PowerPointPres..ppt
Home>Business & Finance homework help>Accounting homework help>Final Project

CARDINAL WHOLESALERS

Cardinal Wholesalers

My Presentation

*

Fraud investigation cases at Cardinal Wholesalers

  • Factors associated with fraud include:

Opportunity

Pressure

Rationalization

  • Bill Carter and Mike Smith committed fraud at Cardinal Wholesalers and, hence, will be evaluated based on the fraud triangle.

*

Bill Carter

  • Bill Carter was fired for visiting inappropriate websites while at the company.
  • Due to the unfair nature of the termination employment, Bill Carter’s decision to commit the offence was in relation to the fraud triangle.

He used rationalization to try to justify his reasons for defrauding the company.

He was under financial pressure due to debts and bills as well as the unsuccessful search for unemployment.

He had the opportunity as a result of his friendship with Mike.

*

Mike Smith

  • Mike Smith took the position of Bill Carter after Bill Carter was fired, i.e. the head of purchases position at the organization.
  • Considering the fraud triangle;

Mike Smith had the opportunity to commit the fraud because of his position in the organization.

He was also under financial pressure due to debts as a result of his expensive lifestyle and his addiction to gambling.

Mike used rationalization to justify his actions of defrauding the company since the company was still making profits.

*

Vendor Schemes and how they work

  • With the increasing rate of vendor schemes, fraud is at an increased rate. The two are directly proportional.
  • Vendor schemes occur when the accounts payable are manipulated by people with malicious intents.
  • In a vendor scheme, the employee generates some made-up payment to themselves using the company’s payment system.
  • In the case studies above, Bill Carter created a shell company that Mike Smith was making payments to.

*

Detection, investigation and prevention of vendor schemes

  • Vendor schemes could be detected by;

Sudden increase in the organizations expenses

Unusual vendors added to the list of vendors

Unusual fluctuations in payables

  • Investigation of vendor schemes could be done by;

Evaluating payments of expenses

Allow the manager to account for fluctuations in expenses

Investigating details of any unusual vendor

*

Continuation…

  • Prevention of vendor schemes could be done by;

Always know the vendors and often update the vendor list

Vetting of the vendors

Recording details of the vendors

*

Sorting out the vendors list

  • The vendors list could be sorted out by using the Auto Filter Function in Excel.
  • The Excel Auto Filter Function easily sorts out large amount of data and is used to generate all reports regarding vendors with fraud cases.
  • Excel Auto Filter Function is first feed with the credential information of all the 1000 vendors under the auditing process such as Taxpayer ID, Address, and phone number in their respect vendors data fields.
  • The filter function is programmed in a way that it will generate vendors with suspicious activities

*

Continuation…

  • The Excel Auto Filter Function, therefore, generates all information on vendors with suspicious activities and unethical behavior.
  • The vendors taxpayers’ ID, their address, and telephone number are the essential fields required to be fed into the Excel Auto Filter Function for the auditing and fraud inspection.
  • The Excel Auto Filter Function generated six vendors who had the most suspicious activities, most of which had only one irregular feature.

*

Continuation…

  • The Connect was the first vendor with suspicious activity, who had both the taxpayer ID and phone number missing.
  • The second vendor was PC ONE who had both the phone number and physical address missing.
  • S $ B Foods Inc. was the third vendor that lacked a phone number and a valid taxpayers ID.
  • Stamen Floral Distributors had no legit physical address and no phone number.
  • Freshen beverages was the fifth vendor who lacked a valid taxpayer ID and had his physical address listed down as the primary address.
  • The sixth vendor, Tri-State-Trucking also lacked a valid taxpayer ID and listed their physical address as the primary address.

The Connect was the first vendor with suspicious activity, who had both the taxpayer ID and phone number missing.

The second vendor was PC ONE who had both the phone number and physical address missing.

S $ B Foods Inc. was the third vendor that lacked a phone number and a valid taxpayers ID.

Stamen Floral Distributors had no legit physical address and no phone number.

Freshen beverages was the fifth vendor who lacked a valid taxpayer ID and had his physical address listed down as the primary address.

The sixth vendor, Tri-State-Trucking also lacked a valid taxpayer ID and listed their physical address as the primary address.

*

Investigating vendors and generating red flags

  • Inspection of fraud could be indicated using red flags for various vendors by inputting data and credentials related to the vendors.
  • Red flag indicators in the Excel Auto Filter Function will evaluate the invoice and database data.
  • Excel Auto Filter Function is an essential tool when it comes to matters concerning auditing send fraud detection.
  • After feeding the system with data, a comprehensive review and inspection of the vendors’ invoice is done to determine suspicious symptoms.

Red flag indicators are a feature present in the Excel Auto Filter Function; they are used to evaluate invoice and database data. Excel Auto Filter Function is an essential tool used in auditing and fraud detection. After feeding data to the system, a comprehensive review and inspection of multiple vendors invoices is done so as we can be able to determine various vendors with suspicious symptoms. For example, a vendor may be flagged and be generated by the Auto Filter Function when the vendor may be having a phone number in the database and no phone number when it comes to the invoice data.

*

Continuation…

Activities that could be red flagged include;

  • The Connection did not a telephone number and a taxpayer ID, but possessed a taxpayer ID in the invoice. This characteristic is suspicious.
  • The second vendor, PC ONE, provided an invalid address and had no telephone number but had a phone number indicated in the database hence generating confusion.
  • S $ B Food Inc. missing information of phone number and taxpayer ID was later found in the data of an invoice.
  • Stamen Floral Distributor had no phone number and a valid address. The phone number was later found in the system and so was the physical address.

Activities that could be red flagged include;

The Connection did not a telephone number and a taxpayer ID, but possessed a taxpayer ID in the invoice. This characteristic is suspicious.

The second vendor, PC ONE, provided an invalid address and had no telephone number but had a phone number indicated in the database hence generating confusion.

S $ B Food Inc. missing information of phone number and taxpayer ID was later found in the data of an invoice.

Stamen Floral Distributor had no phone number and a valid address. The phone number was later found in the system so was the physical address..

*

Continuation..

  • The fifth vendor, Freshen Beverages, had no valid taxpayer ID and address. This information was later found in the system.
  • Tri-State- Trucking, the sixth vendor, had no physical address and valid taxpayer ID which were later found in the system.

Such activities were suspicious and could be detected by red flag indicators.

*

References

  • Dellaportas, S. (2013). Conversations with inmate accountants: Motivation, opportunity and the fraud triangle. Accounting fórum, 37(1), 29-39.
  • Greenberg, J. (2017). A social influence model of employee theft: Beyond the fraud triangle. McGrawHill.

*