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Fraud Risk Assessment and Vulnerability final

Employees steal the merchandise another employee

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employees steal the merchandise .Another employee could collude with warehouse employee to steal evidence. Use another employees access codes when committing theft. Collude with people who are responsible for Change in lifestyle of a particular employee. Mood swings. An employee chosing not to use vaction time. Most asset misappropriation frauds are caused by a percieved financial needs. A perpetrator may have incurred unexpected expenses or lost a revenue stream. The perpetrator may also be pressured to commit the fraud by either an outside party, relative, friend, or coworker. A senior worker may threaten a perpetrator with punishment if they do not go along with the fraud. An employee may be unhappy with the company, have excessive debt or liens on their property. No person is harmed by the thefts. No building security or surveillance, inadequate documentation, of asset locations. There may be an increase in inventory written off as spoiled, damaged, or stolen. An decrease in shipping costs and storage costs may be recorded in order to compensate for decreased inventory amount. Identify areas where there is an increase of spoilage. Create a period of invigilation to try and discover who may be commiting the fraud. Review security footage. SAB 101-sets the criteria for how and when a company cany recognize revenue A company rmanagemnt, or accountants, can record transcations despite the fact hat they do not meet SAB 101 qulifications Actons such as channel stuffing, soft sales, and round tripping violate SAB 101 It depends on which scheme was used to violate the law. Suspiciously inflated revenues. Revenue sources not properly disclosed Managers can feel that they will lose their job if company isn't portrayed to be more successful. Better internal aduiting practices. Look for GAAP violations involving early recording of revenues. Intentionally writing a check for a value greater than the account balance from an account in one bank, then writing a check from another account in another bank, also with non- sufficient funds, with the second check serving to cover the non- existent funds from the first accoun. Collusion with employee at the bank or establihment. Frequent deposits daily to account with cash not consistant with normal banking activities.Deposit s to account with items from a different bank where maker and payee are the same Most check kiting frauds are caused by a percieved financial needs. A perpetrator may have incurred unexpected expenses or lost a revenue stream. The perpetrator may also be pressured to commit the fraud by either an outside party, relative, friend, or coworker. A senior worker may threaten a perpetrator with punishment if they do not go along with the fraud. No person is harmed by the thefts. Limit the number of transactions between related accounts within a given period. e investigator must look at 100 percent of the deposits and deposited items during at least three months of the suspected period. This time is sufficient to determine whether a kite pattern exists.
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