F & C International

Corporate Fraud Name Institution Affiliation Course Date of Submission Question 1 Corporate fraud has been rampant even after the enactment of Sarbanes Oxley act. This is because there are barriers that deter full implementation of t he act paving way for a continued corporate fraud. New measures need to be considered to eradicate corporate fraud ensuring investors’ security of their money. The work environment must be defined in a manner that reinforces the anti-fraud behavior. The stakeholders have to lead through their commitment to do the right things for the good of the company. The policies and procedures has to specify actions of fraud in a company and actions taken when there is a detection of any kind of fraud. The policies must be enforced fairly and in consistence with the company’s processes. In t he process of hiring management the board must ensure that a routine check to the process, in addition to all venders and suppliers before their approval. This allows the company’s business associates be credible, as there references are checked routinely. The internal control system must be set in a way duties are segregated in manner that reconciliation of account statements are easily monitored and controlled where spot checks are conducted without announcement (Jickling, 2004). Compliance with regulations and legislative measure enhances employees to be cautious while committing fraud. This improves the internal control enforcement through creation of business code of conduct and the institution of mandatory training. Question 2 Proper internal control is required to eliminate the thread of fraud. Internal controls are methods and procedures employed in safeguarding assets and management of resources minimizing errors in accounting records to deter fraud. There are various factors that require consideration in setting internal control system. The control environment must set a tone that influences control consciousness of employees. This is the foundation of providing discipline where integrity, ethical values competence are developed and organized to human resources and direction provided (Internal Controls, 2012). The control system must be able to asses both internal and external risks, as it establishes objectives linked at various levels and internal consistence. The assessments provide the identification and analysis of inherent fraud risk factors. Control activities must be enhanced in meeting the objectives of the company. The activities are carried out at every level of business function in addressing relevant risk at every level. Information and communication must be enhanced to enable employee responsibility. Effective communication provides significant information within an organization. Monitoring of internal control system is paramount as it allows the evaluation of activities by the central units or audit parties. Monitoring allows the assessment of the performance quality of internal control system over time for efficiency and effectiveness. Question3 Actions of fraud continue with some employees’ knowledge, but there are factors that deter them from reporting the fraudulent acts. When confronted by an employee regarding acts of fraud going on, the most appropriate action is to monitor their activities, collecting all financial statements which include inventory account, account receivable and account payables and the bank statements. This should follow review off the statements to determine the fraud factor and after analyzing the statements. They will provide evidence of the state of fraud that is being conducted (Bell, 2010). If the evidence is enough it should then be communicated to the relevant authorities to enable them conduct an investigation regarding case of fraud. The investigation into allegation of fraud must be focused of the person responsibility for the crime for prosecution. Catherine sprauer should have investigated the fraud allegation and take the necessary steps in reporting the act to concerned authority. This would have saved the extent to which the company was impacted ...