Aa205 Risk Management (Fraud)
11/10/2012
1
2
Junction Falls Finance and Accounting Services
AA205 Risk Management, Control and Ethics
Joe Metros Director
Seminar 7.1: Ethics, Fraud Risk and Communication
Libby Jones –
Chief Accountant
Group 6
Marsee Weston –
Fixed Asset
Manager
Overview
Scott Smyth –
Cash/Debt &
Investment
Manager
Scenario 1
Cathy Elgin –
Accounting
Assistant (A/R)
Scenario 2
Bob Thomas –
Accounting
Assistant (A/P)
Scenario 3
Nora Stewart –
Accounting
Assistant (A/P)
Scenario 4
Scenario 5
Chuck Sanchez –
Accounting
Assistant (Payroll)
Past Fraud
Cases
3
4
Combining Questions 1 & 2
Junction Falls Finance and Accounting Services
Absence of internal audit staff
Identify and discuss fraud factors in each of the scenarios
Audited by Watson & Watson, LLP for past 13 years
Suggest specific steps that should be taken to investigate if misappropriation or fraud is occurring
Collected $89m in gross operating revenue last year
Overview
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
Past Fraud
Cases
Overview
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
5
Past Fraud
Cases
6
Scenario 1 – Accounts Payable Process
Case Facts
Nora & Bob (A/P clerks) check each other’s documents for accuracy daily
Scenario 1
Accounts Payable Process
Each Tuesday, Libby (Chief Accountant)
- collects invoices to be paid for that week
- prepares documentation so that checks can be drawn and mechanically signed
Overview
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
Past Fraud
Cases
1
11/10/2012
8
7
Scenario 1 – Accounts Payable Process
Case Facts
Scenario 1 – Accounts Payable Process
Case Facts
Every Wednesday morning, Libby
After Libby got into an accident,
- collects printed checks
- verifies each check with the check register
- confirms all supporting documentation
- sends
1
2
Junction Falls Finance and Accounting Services
AA205 Risk Management, Control and Ethics
Joe Metros Director
Seminar 7.1: Ethics, Fraud Risk and Communication
Libby Jones –
Chief Accountant
Group 6
Marsee Weston –
Fixed Asset
Manager
Overview
Scott Smyth –
Cash/Debt &
Investment
Manager
Scenario 1
Cathy Elgin –
Accounting
Assistant (A/R)
Scenario 2
Bob Thomas –
Accounting
Assistant (A/P)
Scenario 3
Nora Stewart –
Accounting
Assistant (A/P)
Scenario 4
Scenario 5
Chuck Sanchez –
Accounting
Assistant (Payroll)
Past Fraud
Cases
3
4
Combining Questions 1 & 2
Junction Falls Finance and Accounting Services
Absence of internal audit staff
Identify and discuss fraud factors in each of the scenarios
Audited by Watson & Watson, LLP for past 13 years
Suggest specific steps that should be taken to investigate if misappropriation or fraud is occurring
Collected $89m in gross operating revenue last year
Overview
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
Past Fraud
Cases
Overview
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
5
Past Fraud
Cases
6
Scenario 1 – Accounts Payable Process
Case Facts
Nora & Bob (A/P clerks) check each other’s documents for accuracy daily
Scenario 1
Accounts Payable Process
Each Tuesday, Libby (Chief Accountant)
- collects invoices to be paid for that week
- prepares documentation so that checks can be drawn and mechanically signed
Overview
Scenario 1
Scenario 2
Scenario 3
Scenario 4
Scenario 5
Past Fraud
Cases
1
11/10/2012
8
7
Scenario 1 – Accounts Payable Process
Case Facts
Scenario 1 – Accounts Payable Process
Case Facts
Every Wednesday morning, Libby
After Libby got into an accident,
- collects printed checks
- verifies each check with the check register
- confirms all supporting documentation
- sends