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Microsoft Word - Accounting Information Assignment Final.docx Assetsafeguardingandcontrolsystemessay Aims: This assessment is designed to achieve three aims. The first aim is to help develop your understanding of control systems. The second aim is to further your understanding and appreciation of the importance of controls to achieving the organisational goal of asset safeguarding. The third aim is to help develop your writing skills by producing a concise, straightforward, and brief essay. The essay is based on Belfast City Council. I have also included information on the fraud at Brisbane City Council as a reference. However, the entire essay is based on the Belfast City Council and not Brisbane City Council. You are asked to make a brief similarity between Belfast City Council and Brisbane City Council. FraudstersscamBelfastCityCounciloutofpossible£400k BYVICTORIAO’HARA August06201306:45PM AmajorprobehasbeenlaunchedbypoliceintoanallegedfraudatBelfastCityCouncil believedtoinvolveupto£400,000ofratepayers’money. Thescamcametolightafteracompanyenquiredaboutamissedpaymentofhundredsof thousandsofpounds. Thecouncilhadinformedthefirmithadbeenpaid—butthemoneyhadfailedtoappearin theirbankaccount. Itisunderstoodtheaccountdetailsofthelegitimatefirmhadbeenaccessedbysomeone posingasacouncilrepresentative. Anotherpersonactingasthecontractorapproachedthecouncilforpaymentandprovided bankdetails.Thefundswerethentransferredtothebogusaccount. BelfastCityCouncilwouldnotcommentontheamountofcashinvolvedbutitisbelievedto bebetween£250,000and£400,000. Policeconfirmedtheyareinvestigatingareportoffraudandenquireswereongoing. Acouncilsourcesaidthepublicmoneyshouldberecoveredthroughinsurance. Butcouncillorshavenowdemandedanemergencymeetingsaying“fulldisclosure”is neededintohowthishappened. Councillorshavealsosaidtheyareangrytheywerenotinformedabouttheincidentthat involvespublicmoney. ItisfearedthecouncilhasbecomethelatesttargetinascamthathashitUKauthorities overthelastthreeyears. Itisunderstoodthosebehindthescamresearchfirmscarryingoutworkforcouncils.They thenmakeaboguscallorcontactthecouncilclaimingtheyarefromthelegitimatefirmand saytheirbankdetailshavechanged. Theythenaskthecounciltoalterthedetailsandpaythemoneyintoanewaccount. Therearesetprotocolsinplaceforstafftofollowwhendealingwithfinancialissues. Thecouncilsaidtheydonotcommentonindividualcasesinvolvingmembersofstaff, howeveritisunderstoodatleastonepersonwhoworksforthecouncilhasbeensuspended whiletheinvestigationisbeingcarriedout. Thereisnosuggestionthatanycouncilemployeewasinvolvedinanycriminality. AspokeswomanforBelfastCityCounciltoldtheBelfastTelegraph:“Thecouncilisawareof anallegedexternalfraudandthematteriscurrentlybeinginvestigatedbythepolice.” BelfastCityCouncilcouldbethelatestvictiminawaveofbankscamsagainstcouncils acrosstheUKoverthelastthreeyears. InJuly2012SalfordcouncilinEnglandwasdupedoutof£130,000whenacouncilmember ofstaffwaspersuadedtochangebankdetails.TheNationalFraudIntelligenceBureauwere alerted. In2010SouthLanarkshireCouncilinScotlandwereconnedoutof£102,000.Thecashwas paidtoagangafterreceivingdocuments—supposedlyfromoneoftheirsuppliers- instructingachangeofbankdetails. Dozensofotherauthoritiesarealsobelievedtohavepaidouttoagangofconmen,believed tobefromWestAfrica. AspokeswomanforthePSNIsaid:“Policehavereceivedanallegationoffraud.An investigationisunderwayandenquiriesarecontinuing.” CouncillorPatMcCarthysaidseriousquestionsneedtobeansweredimmediately.“This raisesquestionsabouttheleadershipofthecouncilaboutwhatelseisbeingwithheldfrom councillorsandhowthismoneywillbereplaced,”hesaid. “Thisisadisgracethatelectedmemberswerenotinformedaboutthisandthefirstwe knewwasafterbeingcontactedbyjournalists. “Thereneedstobefulldisclosure.” Anothercouncillorsaidtherewasaneedfor“bettertransparency”inthecouncil. “Partoftheproblemisonceagainthedelegatedpowerswhichhavebeengiventothechief officersandinformationisnotbeingimpartedtous-evenifitisaseriousnaturesuchas fraud,aboutratepayersandmoney.” Councillorshavesaidaspecialmeetingofthecouncilisneededtodiscusstheissue. Thecouncil'sauditcommitteewillreceiveareportnextmonthregardingthematter. BelfastTelegraph Expected length: This essay should not exceed 4 pages, including references, double-spaced 12-point Arial font. Referencing style should be APA or Harvard and should remain consistent throughout your essay. 4 pages of Essay plus 1 page of references. Suggested information sources: https://www.europol.europa.eu/activities-services/public-awareness-and-prevention- guides/take-control-of-your-digital-life-don%E2%80%99t-be-victim-of-cyber-scams https://www.europol.europa.eu/activities-services/public-awareness-and-prevention- guides/infographic-fraud-scams-targeting-employees Preliminary information: While on a holiday in Ireland 2 years ago you remember hearing about the fraud, above, from a friend while visiting the Christmas Markets at Belfast City Hall. Just recently you have been employed by Golden Beach Regional Council (hereafter GBRC) in Southern New South Wales as its Deputy Financial Controller. Part of your role is to mitigate risks for all aspects of the Council’s financial dealings. Having completed a course in Accounting Information Systems you are aware of the importance of, and are familiar with, preventative, detective, and corrective controls. Recalling your friend’s story about the Belfast City Council, you see many parallels with GBRC. Both rely heavily on contractors, both seek to further the interests of their, respective, communities, and both have elected councillors and managers who likely possess limited financial management skills. Recognising the potential for fraud existing at GBRC, you approach the Council’s Financial Controller raising your concerns. You recount the Belfast City Council’s fraud story, but also note that a similar fraud happened to the Brisbane City Council where some $450,000 was defrauded. The Financial Controller immediately understands the potential for fraudulent activity to occur at GBRC and wants to make sure the councillors, and especially the managers overseeing procurement, are aware of the potential for such frauds. You tell the Financial Controller that you will develop a briefing for the councillors and managers summarising how the fraud that took place at Belfast City Council worked. In addition, your report should summarise the fraud’s tangible and intangible costs to Belfast City Council, the Belfast City Council’s control problems, the type of controls GBRC should implement, and whether the controls you suggest are preventative, detective, or corrective. Almost all of the councillors and managers (as most have risen through the council on seniority) have no background in Accounting Information Systems, in fact, most of the councillors are lawyers, retirees, and one is a former Army Officer. Needless to say, they have little understanding of controls. As a result, your briefing must be well researched, concisely and clearly written, accurately referenced, and, very importantly, use non-technical terms. Your briefing should highlight the similarities between Belfast City Council (and Brisbane City Council) and GBRC, providing brief examples of the fraud to ensure the GBRC councillors understand the nature of the fraud. Further, the higher the quality of your presentation, the more likely the councillors will view you as an excellent candidate for the Financial Controller position (the current FC has indicated her intention to retire at the end of the financial year). In short, the spelling, grammar, and writing in the briefing must be to the highest standard. Format of Essay: Using the same headings, e.g., “How the fraud worked”, etc., you should set out your essay in this order. How the fraud worked: In this section, you should provide a brief summary of how the fraud worked at Belfast City Council. You should also provide an overview of who was involved in the fraud, e.g., who was being imitated and how the fraud was uncovered. (1/2 page max). The fundamental control problems: This section elaborates on Belfast City Council’s fundament control problems. You should state what the problems were and the levels at which the control weaknesses occurred (e.g., transaction, operational, management, strategic). In general, summarise who had exploited those weaknesses, and how they had exploited the weaknesses. You should also summarise what the motivations and benefits were to the fraudsters as well as summarising the tangible and intangible costs to Belfast City Council to ensure the GBRC councillors (and managers) understand the extent of the costs of such fraud! (2 pages max). Explain briefly controls that you would suggest that could have helped avoid this type of fraud: Having summarised how the fraud worked and what the control problems were at Belfast City Council, you should draw the two together and recommend at least two (2) controls that focus on reducing the likelihood of such frauds occurring at GBRC. As always, you should explain how the controls would help avoid similar frauds happening at GBRC and explain how those controls would work. (1 page max). For each suggested control, explain whether it is preventive, detective, and/or corrective in nature: In this section, you should explain whether the controls you suggest to GBRC are preventative, detective, and/or corrective. Remember, the councillors are not experts so your explanation will have to be non-technical (1/2 page max). Please set out your essay in the following way – it will help you maintain a consistent and logical progression as you address each point. Remember this essay should be no more than 4 pages in length, 12-point times new roman double spaced and including any references. So, it's short! The reason for this brevity is to help you write clearly, concisely, and in non-technical terms. Remember you’re trying to get complex ideas across to a non-technical audience in just a very short time. In this section, you should provide a brief summary of how the fraud worked, in this case at Belfast City Council. You should also provide an overview of who was involved in the fraud, for example, who was being imitated and how the fraud was uncovered. There’s no need for personal names simply use Belfast Council, the fraudsters, the contractor, etc. Please limit this section to no more than ½ page. Next part of your essay, the fundamental control problems. This section elaborates on Belfast City Council’s fundamental control problems. You should state what the problems were and the levels at which the control weaknesses occurred. For example, at the strategic level was there a culture of control at Belfast council, while you may not know, this may be a legitimate concern. You can speculate, it could possibly be the case. At the management level, who had the delegation to authorise changes to the standing data? For example, at the operational level, what was the process to make changes to the standing data. Imagine if someone had called the contractor to check with them. At the transactional level who had access to the standing data and was their access necessary? In general, summarise who had exploited those weaknesses, and how they had exploited the weaknesses. You should also summarise what the motivations and benefits were to the fraudsters as well as summarising the tangible and intangible costs to Belfast City Council to ensure the GBRC councillors (and managers) understand the extent of the costs of such fraud! Limit this section to no more than 2 pages. You have to be brief and clear! Okay, next section. Explain briefly controls that you would suggest that could have helped avoid this type of fraud. Having summarised how the fraud worked and what the control problems were at Belfast City Council, using the same format, you should draw the two together and recommend at least two controls that focus on reducing the likelihood of such frauds occurring at GBRC. As always, you should explain how the controls would help avoid similar frauds happening at GBRC and explain how those controls would work. Limit this section to no more than 1 page. So for the next section, for each suggested control, explain whether it is preventive, detective, and/or corrective in nature: In this section, you should explain whether the controls you suggest to GBRC are preventative, detective, and/or corrective. Remember, the councillors are not experts so your explanation will have to be non-technical. Limit this section to no more than half a page. uqdrobb Highlight uqdrobb Highlight