The paper "Opportunities for Fraud in the Green Grass Company" is an outstanding example of a business assignment. It is quite evident that auditing is an important aspect of any organization. When an organization accounting system is filled with various fraudulent activities it sends threats that may result in the fall of the organization performance. From the case study, it is quite evident that there were various clues that caused Jane to suspect that fraud was involved within ABC. Firstly, Jane had initially sense that some accounts payable checks lacked a complete endorsement by the payees.
Her concern about the lack of complete endorsement of the check grew further by the fact that most checks that lacked endorsement were more payable to dual payees whereby each payee endorsement is highly required. Further, the clues become more evident because the handwriting on all the endorsement looks the same but the handwriting was different. Jane also realized that the checks lacked proper supporting documentation. This made her identified previous payments to the same payees and retrieved their paid checks where he realized that the endorsement did not match with the endorsements on the suspicious check (Edward, 2004). Evidently, it is very important for all organizations fraud examiners to follow up even on the smallest inconsistencies.
It is quite evident that small inconsistencies often result in bigger inconsistencies which do not only destroy the company image but also causes the collapse of the business. There is a need to develop written fraud policies that each and every employee actions will be governed by. Small inconsistencies continue to plague many organizations as well as stakeholders across the globe.
And with this regard, it is necessary to have a follow up so as to obtain relevant information that can be used to avoid a major fraudulent case within the organization. Having an adequate follow up in fraud cases, enable fraud examiners to have an upper hand in advancing their audit processes thus creating a better method that can detect any kind of fraud. Small inconsistencies can increase the salience of fraudulent especially in financial reporting if not carefully followed up. Follow-ups are important in testing the effects of accountability pressure on fraud examiners perceived responsibility for judgment performance and fraud detection (Gregory, 2003). It is quite evident that in an attempt to identify possible suspects, the auditors in this case researched on their personal files of every employee in the department.
It was important to go through their personal files so that the fraud examiners can be in a position to compare past and present activities which will effectively enable them to determine any reason for fraudulent to have taken place. The reason why fraud examiner looks for personal files is to try to find whether there is a change in signature or payment detail.
Fraud examiners are able to determine any kind of fraudulent activity by checking on the amounts that are normally paid to an individual and check if there is a change in the names of the payee (Gregory, 2003). Case 2 There are indeed several opportunities for fraud in the Green Grass Company. First, the idea of the owner to involve his children into the business was clearly miscalculated. Although a lot of researchers have proved that family has a potential of causing success and longevity of a business and more so small businesses, there are also several disadvantages of the same (Aldrich and Cliff, 2003).
It is quite possible for the children to embezzle business money for their own personal activities with the idea that the business belongs to them. This might consequently have negative effects on the financial outcome of the business. In addition, children tend to overlook each other especially when it comes to doing some jobs. In this case, where the children are hired in the lawn mowing care, some tasks might go unattended due to the factor discussed above.
Again, the case states that the section of lawnmowers is mainly operated by young people which again present an opportunity for fraud. Although young people do provide a wealth of expertise into the business, the nature of their lifestyles might cause them to become unreliable more so if they are not under the supervision of an older person. Another opportunity for fraud in the business was the employment of only one person in the office.
Clearly, this person was overloaded with clerical and accounting work considering that the operations of the business were constantly increasing.
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