Fraud Examination
Fraud Examination
5th Edition
ISBN: 9781305079144
Author: W. Steve Albrecht, Chad O. Albrecht, Conan C. Albrecht, Mark F. Zimbelman
Publisher: Cengage Learning
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Chapter 4, Problem 14SC
To determine

Using five factors what should be done to reduce fraud in an organization.

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If a tech industry company has their total stockholder's equity go up by $793,000 and their Software development costs and licenses(net of current portion) go up by $85,000 within 1 year and they have had a previous fraud in their company, what audit procedures should be performed?
Greenwor Manufacturing Company You have been hired to investigate possible fraud losses in Greenwor Manufacturing Company. Greenwor’s attorney contacted you in confidence and told you that she has had many tips indicating that Chad Wits, the CFO, is somehow stealing large sums of money from the company. Wits earns a good salary of $300,000 per year, but company employees report that he has recently purchased a $4 million house, a sail yacht worth at least $2 million, and one employee said that he spends his weekends in Las Vegas, where he loses very large sums of money on a regular basis. Some employees have seen him driving a new Maserati sports car near a local shopping mall, but he always arrives at work with a plain, aged family car.Requireda) What steps would you take to conduct your investigation?b) What information would you need to develop a fraud theory?c) Does the information you currently have provide sufficient predication for an investigation?
Penco Ltd’s board of directors are looking into expanding the company’s business operations. Before investing in a new product, the board conducted one focus group, and based on this one bit of feedback, invested $5m of company funds to develop the product. Within two years, the company had lost $8m due to poor sales. Shareholders are furious and wish to hold directors personally liable for this loss. Analyse the likely outcome for directors if shareholders were to accuse the board of breaching CA s 180.
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