Mara Fuentes Lorca Chapter 1: Assignment

1. 1) The first company will generate $2000 more in revenues while the second one will generate $5000 more in revenues. 2) This is because their profit margins (Net Income/Revenues) are different. 3) The one with the smaller profit margin will need to generate less revenues.

3. 1- Customer fraud 2- Investigation scam 3- Employee embezzlement 4- Management fraud 5- Vendor fraud 6- Miscellaneous fraud

6. If I were the lawyer I would prosecute her by civil law, in order to obtain a remedy, such as restitution and damage payments.

7. Yes, I think that is this situation fraud has been committed. Yes, you have to report the activity to your managers.

Mara Fuentes Lorca Chapter 2: Assignment 1.

1) System of authorizations: consumer should approve those credits. 2) System of authorizations and documents and records: the company should approve and be aware of whatever its accountant is doing. 3) Independent checks and physical safeguards: they have unlimited access to the storeroom. 4) Documents and records: They should fill documents properly.

4. 1) Her perceived opportunities were the lack of controls and audit trail. 2) Ruth had a vice-pressure due to gambling. 3) Yes, because she was trusted and nobody suspect from her, then she has more opportunities and time to commit fraud. 4) They are the worst kind of pressure, since they annulated people will.

6. 1) Yes, she has life pressure due to family crisis. 2) She has high pressure and opportunities, but we dont know about her personal integrity. 3) I would provide her some of my thoughts, since we still dont know them for sure.

10. 1) Money stolen, lost of trust in his employees, discover is more fraud have been committed and scare of losing control on his company. 2) Lack of internal controls, isolated case, dont want to lose the trust of his other employees. 3) I would prosecute him.

Mara Fuentes Lorca Chapter 3: Assignments

5. 1) Positive feelings about and organization and sense of ownership they both really helps to avoid fraud. 2) Top management doesnt care about the employees behavior. - Negative feedback or lack of recognition for job performance. - Perceive inequities in an organization. - Autocratic management. - Low organizational loyalty. - Unreasonable budget expectations. - Unrealistically low pay. - Poor training and promotion opportunities. - High turnover and absenteeism. - Lack of clear organizational responsibilities. - Poor communication within the organizational.

7. Fraud investigation only takes place if predication exists.

8. No legal action. - Civil action: recover money or assets. _ Criminal action: fines/prison.

14. 1) Giving Mary a lot of responsibilities and not putting control on her. 2) With document record, safe keeping and control over it.