Forensic Accounting Case Study 9-26 (1)

Acting as an undercover contractor would also allow

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be able to prove that ABC had the intent to defraud the federal government. Acting as an undercover contractor would also allow the investigative team the possibility to interact with ABC from the perspective of an employee. This is especially important considering most frauds are detected from within the company. Finally, ABC is much more likely to attempt to hide it actions if being investigated by a visible third party entity. An undercover NCIS investigation could possibly circumvent this issue, since it is much more likely that the undercover sub- contracting company would be trusted more relative to an official government inquirer. Case Study 4 There are six different types of fraud symptoms. Analytical anomalies exist when there is a discrepancy between financial and nonfinancial data. For example, one would assume that with a decrease in sales there would be a subsequent decrease in revenue. Observing an instance where there is a decrease in sales but revenue increases would warrant investigation that a fraud may be taking place. More symptoms of fraud are behavioral and lifestyle symptoms. Lifestyle symptoms can be described as an employee living beyond the means that their known job provides. An example of this would be a desk clerk driving a different “high-ticket” car to work every day of the week. However, these sorts of things do not necessarily indicate that fraud is going on. A person could exhibit a lifestyle beyond what the job affords for several reasons. They may have inherited some money, leasing the physical merchandise, or even be engaged in other business legitimate business practices you may not be aware of. Behavioral symptoms are when a person has mood changes at work. This does not definitively indicate fraud is present either due to the fact that not everyone’s mood is stagnant throughout the day. Moods change due to a number of seen and unseen variables in a person’s life. Accounting anomalies are symptoms of fraud and these can be described as irregularities in source documents or unusual behavior involving these documents. These instances are worth investigating because a person may be intentionally affecting these documents, but there also is the possibility that there are anomalies due to honest mistakes. Tips and complaints are also a good indicator of fraudulent activity.
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