Accounting fraud in large public companies has produced its fair share of major


Accounting fraud in large public companies has produced its fair share of major news headlines over the past 20 years. Even though laws like Sarbanes-Oxley have been put in place to minimize the opportunity for financial fraud, the threat is still real in today’s corporate environment.
Imagine you have been hired to oversee the financial audit of a major company in your city. During the audit, one of the company’s employees has disclosed a potential fraud situation involving an accounting department supervisor.
In addition to alerting your own manager about the situation, which one of the following options would you choose to perform next as you proceed with your investigation? Only choose one.
Option A: Gather additional information by interviewing other company employees.
Option B: Meet with other members of the management team to discuss the company’s current internal controls for preventing fraud.
Why do you feel your choice would be most effective? Why?
Part 2: Respond to a Peer
Read a post by one of your peers and respond, making sure to extend the conversation by asking questions, offering rich ideas, or sharing personal connections.
Reference Article
The 7 Greatest Financial Frauds in History.
7 of the Biggest Corporate Frauds in History | Stock Market News | US News
Peer discussion:
Hello Professor Lee and classmates,
I would choose B to meet with other management team members to discuss the company’s current internal controls for preventing fraud. As with any profession, rule number one is to perform within your job duties granted under your licensure and covered by your E&O insurance.
I would have a plan of action to follow while auditing all financial accounts. I would follow my POA, document, and discuss my report with management if risk factors were found. If my report involved the financial manager, I would report my findings to their management or discuss them with the individual who hired me. My job would not involve interrogating employees or proving guilt; it would involve gathering data from financial accounts and submitting those findings while including a recommendation for the company to seek legal counsel.


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