d) Describe Purell Magazine and Publishing House fraud prevention programme and identify any improvements that might be necessary to prevent this type of fraud or at least discover it sooner.

Understanding Business
12th Edition
ISBN:9781259929434
Author:William Nickels
Publisher:William Nickels
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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d) Describe Purell Magazine and Publishing House fraud prevention programme and identify
any improvements that might be necessary to prevent this type of fraud or at least discover
it sooner.

As the two of you walked around the grounds, you asked the vice president if he could explain
the accounting codes to you: "He stared at the [top] invoice for approximately 30 seconds and
said: 'That is not my signature on the invoice!' As he looked through the stack, he found what
appeared to be about three or four other forgeries. He was completely baffled."
The initial investigation revealed that all the forgeries were in the painting division, budgeted at
approximately $800,000 a year. In addition, the company employed only one person to oversee
the painting operations in its facilities department: James Small. Small, a 35-year-old from New
Fairfield, Ontario, earned about $30,000 a year.
Transcribed Image Text:As the two of you walked around the grounds, you asked the vice president if he could explain the accounting codes to you: "He stared at the [top] invoice for approximately 30 seconds and said: 'That is not my signature on the invoice!' As he looked through the stack, he found what appeared to be about three or four other forgeries. He was completely baffled." The initial investigation revealed that all the forgeries were in the painting division, budgeted at approximately $800,000 a year. In addition, the company employed only one person to oversee the painting operations in its facilities department: James Small. Small, a 35-year-old from New Fairfield, Ontario, earned about $30,000 a year.
Purell Magazine Construction Fraud
You are a newly hired fraud examiner. You have been asked to write a preliminary report on the
scenario below, using the information presented in Units 1 to 4 and findings from your additional
research.
Purell magazine and publishing house decided to outsource much of its direct-mail operations to
specialized mail vendors. As a result, the company began converting its plant in Oakville,
Ontario, from a direct-mail-order factory to an office complex. Part of the office complex
construction involved building an auditorium identical to another auditorium in its European
offices.
As a recently hired Auditor and fraud examiner, this is your third day on the job. In an effort to
get to know your new company, you had scheduled a series of interviews with all the vice
presidents. The first interview was with the vice president of administrative services, Richard
Green, who oversaw many construction projects and maintenance services. Because of the
massive renovation project, it was not unusual for hundreds of invoices to be forwarded to
Green.
Coincidence one: You stopped by the accounts payable department and retrieved a series of
recently submitted invoices for various trade expenses related to the auditorium construction
project. “One of the things you wanted to accomplish was to understand how the accounting
codes worked-what was capitalized; what was expensed; how it was recorded, etc." So, you
grabbed a stack of processed invoices with accounting codes and went up to the construction site
to meet with the vice president for an hour-long interview.
Transcribed Image Text:Purell Magazine Construction Fraud You are a newly hired fraud examiner. You have been asked to write a preliminary report on the scenario below, using the information presented in Units 1 to 4 and findings from your additional research. Purell magazine and publishing house decided to outsource much of its direct-mail operations to specialized mail vendors. As a result, the company began converting its plant in Oakville, Ontario, from a direct-mail-order factory to an office complex. Part of the office complex construction involved building an auditorium identical to another auditorium in its European offices. As a recently hired Auditor and fraud examiner, this is your third day on the job. In an effort to get to know your new company, you had scheduled a series of interviews with all the vice presidents. The first interview was with the vice president of administrative services, Richard Green, who oversaw many construction projects and maintenance services. Because of the massive renovation project, it was not unusual for hundreds of invoices to be forwarded to Green. Coincidence one: You stopped by the accounts payable department and retrieved a series of recently submitted invoices for various trade expenses related to the auditorium construction project. “One of the things you wanted to accomplish was to understand how the accounting codes worked-what was capitalized; what was expensed; how it was recorded, etc." So, you grabbed a stack of processed invoices with accounting codes and went up to the construction site to meet with the vice president for an hour-long interview.
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