Hi. For this assignment, I need one main post and two classmates responses. Please, see instructions below and classmates posts to respond to attached. Thanks
Review the video at the following link:
http://www.acfe.com/content.aspx?id=4294981086
Discuss the type of frauds that the CFEs found. What internal controls could have been in place to prevent, detect, or correct this issue from happening in the future?
Instructions Create a main post (around 200 words) and respond to the two classmate’s post below (around 150 each). 1-Review the video at the following link: (This is for the main post) http://www.acfe.com/content.aspx?id=4294981086 Discuss the type of frauds that the CFEs found. What internal controls could have been in place to prevent, detect, or correct this issue from happening in the future? 2-Respond to the classmate’s post below – about 150 words · Shirley Stenbak posted Mar 26, 2019 7:35 PM One method these executives used to commit fraud was by mischaracterizing their expenses (Wells, 2014). The specific example discussed in the video was the trip the executives took with their wives. They each claimed personal flights, lodging, and meals on the trip as business expenses. In order to prevent, detect, or correct this issue would have been for the person processing expense reports to verify the validity of the flights and hotels. One question I had when considering this issue was how each executive had several tickets for the same trip claimed on their expense reports. To me, one executive should have had one flight and hotel expense for the trip. I also question how it was overlooked that there wasn’t verification of the business purpose for the trip (Wells, 2014). These questions would have easily been answered through verification of the flight and hotel expenses. This scheme also led to each executive submitting and getting reimbursed for the expenses of others (Wells, 2014). This makes me question, again, the submission of several travel tickets by one executive. In my opinion, the person processing expense reports should have seen a red flag based on this behavior. This type of reimbursement could technically fall under the multiple reimbursement type as well because one executive was claiming multiple expenses. All these examples could have been detected and prevented through independent verification and a policy of handing in detailed expense reports. Wells, J. T. (2014). Principles of Fraud Examination (4th ed.), Hoboken, NJ: John Wiley & Sons, Inc. ISBN: 9781118922347 Respond to the classmate’s post below – about 150 words · Madeline Martin posted Mar 26, 2019 3:41 PM The video discussed the finding of expense reimbursement schemes by highly paid executives. Expense reimbursement schemes are a form of fraudulent disbursement that, as the name implies, occur when employees make false claims for reimbursement of fictitious or inflated business expenses (Wells, 2014). Employees who engage in this type of fraud generally seek to have the company pay for their personal expenses, or they pad the amount of business expenses they have incurred in order to generate excess reimbursements (Wells, 2014). Unfortunately, the individuals who conducted the fraud, were in tune with the internal controls or lack thereof. Strengthening their internal controls could help prevent, detect or correct the issue from happening. At a minimum, the segregation of duties, is a simple prevention measure. Periodic evaluation of senior management and executives, should be a requirement, along with all the other staff. A written policy provides continuity and standard for processes. The policy could identify the importance of ethical behavior, how the company will respond when and if a fraud occurs. Without it, the structure of the organization is weaker and lacks consistency. Being able to provide adequate supporting documentation will assist when auditors conduct audits. It’s also a strong indicator that checks and balances were conducted if proper documentation can be presented. Creating a checklist and conducting a self-inspection of the internal control process quarterly, can assist with identifying deficiencies. The more your internal processes are scrutinized, less likely that a fraud can or will occur.