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Chapter 6: Q5BTN_1 (page 317)

Visit the Association of Certified Fraud Examiners website and open the “2016 Report to the Nation” (s3-us-west2.amazonaws.com/acfepublic/2016-report-to-the-nations.pdf). Read the two-page Executive Summary and fill in the following blanks.

1. The median loss for all cases in our study was, with of cases causing losses of $1 million or more.

Short Answer

Expert verified

Answer

The median loss for all cases in our study was $145,000, with 22% of cases causing losses of $1 million or more.

Step by step solution

01

Step-by-Step SolutionStep 1: Introduction to topic

Corporate Fraud: If a company is doing illegal or unethical work or activities to gain a competitive advantage over different corporations in the industry, it is known as Corporate Fraud.

02

Detailed explanation

The loss caused by fraud about median accounts for $145,000. Additionally, the percentage of cases that involve losses amounting to $1 million is 22%.

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Most popular questions from this chapter

BTN 6-1 Refer to Apple’s financial statements in Appendix A to answer the following.

2. For fiscal years ended September 26, 2015, and September 27, 2014, use the information in the statement of cash flows to determine the percent change (rounded to one decimal) between the beginning and ending year amounts of cash and cash equivalents.

BTN 6-3 Harriet Knox, Ralph Patton, and Marcia Diamond work for a family physician, Dr. Gwen Conrad, who is in private practice. Dr. Conrad is knowledgeable about office management practices and has segregated the cash receipt duties as follows. Knox opens the mail and prepares a triplicate list of money received. She sends one copy of the list to Patton, the cashier, who deposits the receipts daily in the bank. Diamond, the recordkeeper, receives a copy of the list and posts payments to patients’ accounts. About once a month the office clerks have an expensive lunch they pay for as follows. First, Patton endorses a patient’s check in Dr Conrad’s name and cashes it at the bank. Knox then destroys the remittance advice accompanying the check. Finally, Diamond posts payment to the customer’s account as a miscellaneous credit. The three justify their actions by their relatively low pay and knowledge that Dr. Conrad will likely never miss the money.

Required

4. Suggest additional internal controls that Dr Conrad could implement

What internal control procedures would you recommend in each of the following situations?

1. A concession company has one employee who sells towels, coolers, and sunglasses at the beach. Each day, the employee is given enough towels, coolers, and sunglasses to last through the day and enough cash to make change. The money is kept in a box at the stand.

For each of these five separate cases, identify the principle(s) of internal control that is violated. Recommend what the business should do to ensure adherence to principles of internal control.

4. Ben Shales prides himself on hiring quality workers who require little supervision. As office manager, Ben gives his employees full discretion over their tasks and for years has seen no reason to perform independent reviews of their work.

Nolan Company deposits all cash receipts on the day when they are received, and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows a \(22,352 debit balance. Nolan’s June 30 bank statement shows \)21,332 on deposit in the bank. Prepare a bank reconciliation for the company using the following information.

a. Outstanding checks as of June 30 total $3,713.
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