Forensic Unit 1 Assignment
Content
Felicia Dunsing Kaplan University AC555-01: Forensic Accounting 1105D July 2011 Term Instructor: Jaquelyn Lewis Unit 1 Assignment High Low Art Value: How a Connoisseur became a Convict
There are several interesting concepts in the article. High Low Art Value: How a Connoisseur became a Convict. The first is Lawrence Fairbanks level of self-assurance. He was regarded as a high standing individual at the University; his education and experience credentials provided exclusivity. His position, Assistant Vice Chancellor of Communications was known to be, the glitziest job in the glitziest department of Aesop University. His position also allowed the financial trust level toexceed the professional norm. Lawrence Fairbanks was social and had formed reliance s with his peers, staff and other university personal. Everyone admired and pretty much looked up to him as a well to-do, caring, and faithful business individual. He assumed the role well. Lawrence Fairbanks demeanor was bold and strong when faced with the reality about his fraudulent behavior. He was arrogant and forthright. This type of personality is one that will commit fraud and boost of their successes.
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Second, Lawrence Fairbanks learned that the University accounting procedures could be manipulated to his monetary gain. He was in a position of authority, had the right to purchase items up to $2,500 without oversight, and dealt with invoices without accounting regulations. As the text indicated the lack of accounting management in the purchasing and invoice control cold have been avoided if financial regulations had been in place; separation of accounting duties, and secondary approval purchases. I would also have to include that the approval of purchase orders, lowering the initial approved monetary amount, and six months reviews or department spending could also prevent fraud activity. Third, a computer program that would allow purchases to be red flagged of suspicious activity such as indicated it the article: repeat payments to the same vendor, payments just under the low-value threshold, vendor names and addresses that seem incongruous with the online descriptions of the expenses. Computer programs are more apt to fish through high levels of information [more so then humans], organize data, and come to a solid conclusion. Computer programs can also detect fraudulent activity that occurs amongst other interactive departments; detecting fraud on a broader scale. Forth, I personally believe that there is always someone who is aware of the fraudulent behaviors of others and is willing to share the information [although the test states differently], but has no outlet to do so. No one commits a fraudulent act without another s suspicion of knowledge. Someone somewhere is a witness and has some idea of what is going on. Anonymous Hotlines are allowing us to pear into the alleged hidden acts of the world. There is even a hotline for dogfighting. Every vocational setting should have a hotline. This case had sufficient predication. A vender, with accounting background, contacted and reported the alleged fraudulent activity. Fifth, the audit professional preformed the outlined fraud theory approach that involves the following steps: 1 - analyze available data (collected invoices with certain criteria), 2 - create a hypothesis (he had formed personal relationships between a number of vendors, his personal interests
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in art and high quality items where proved to be excessive personal spending), 3 - test the hypothesis, and 4- refine and amend the hypothesis. Sixth, the tools that the investigator used proved to be successful; document analysis 9invoices0, neutral third-party witnesses (vendors) and interviewing techniques (display of invoices and photos during interrogation). And finally, this case proved to have all of the necessary action to be classifies as occupational fraud. As stated in the test (pg. 8), Four elements common to these schemes were first identified by the Association of Certified Fraud Examiners in its 1996 Report to the Nation on Occupational Fraud and Abuse, which stated: The key is that the activity (1) is clandestine, (2) violates the employee s fiduciary duties to the organization, (3) is committed for the purpose of direct or indirect financial benefit to the employee, and (4) costs the employing organization assets, revenues, or reserves.
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There are several interesting concepts in the article. High Low Art Value: How a Connoisseur became a Convict. The first is Lawrence Fairbanks level of self-assurance. He was regarded as a high standing individual at the University; his education and experience credentials provided exclusivity. His position, Assistant Vice Chancellor of Communications was known to be, the glitziest job in the glitziest department of Aesop University. His position also allowed the financial trust level toexceed the professional norm. Lawrence Fairbanks was social and had formed reliance s with his peers, staff and other university personal. Everyone admired and pretty much looked up to him as a well to-do, caring, and faithful business individual. He assumed the role well. Lawrence Fairbanks demeanor was bold and strong when faced with the reality about his fraudulent behavior. He was arrogant and forthright. This type of personality is one that will commit fraud and boost of their successes.
1
Second, Lawrence Fairbanks learned that the University accounting procedures could be manipulated to his monetary gain. He was in a position of authority, had the right to purchase items up to $2,500 without oversight, and dealt with invoices without accounting regulations. As the text indicated the lack of accounting management in the purchasing and invoice control cold have been avoided if financial regulations had been in place; separation of accounting duties, and secondary approval purchases. I would also have to include that the approval of purchase orders, lowering the initial approved monetary amount, and six months reviews or department spending could also prevent fraud activity. Third, a computer program that would allow purchases to be red flagged of suspicious activity such as indicated it the article: repeat payments to the same vendor, payments just under the low-value threshold, vendor names and addresses that seem incongruous with the online descriptions of the expenses. Computer programs are more apt to fish through high levels of information [more so then humans], organize data, and come to a solid conclusion. Computer programs can also detect fraudulent activity that occurs amongst other interactive departments; detecting fraud on a broader scale. Forth, I personally believe that there is always someone who is aware of the fraudulent behaviors of others and is willing to share the information [although the test states differently], but has no outlet to do so. No one commits a fraudulent act without another s suspicion of knowledge. Someone somewhere is a witness and has some idea of what is going on. Anonymous Hotlines are allowing us to pear into the alleged hidden acts of the world. There is even a hotline for dogfighting. Every vocational setting should have a hotline. This case had sufficient predication. A vender, with accounting background, contacted and reported the alleged fraudulent activity. Fifth, the audit professional preformed the outlined fraud theory approach that involves the following steps: 1 - analyze available data (collected invoices with certain criteria), 2 - create a hypothesis (he had formed personal relationships between a number of vendors, his personal interests
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in art and high quality items where proved to be excessive personal spending), 3 - test the hypothesis, and 4- refine and amend the hypothesis. Sixth, the tools that the investigator used proved to be successful; document analysis 9invoices0, neutral third-party witnesses (vendors) and interviewing techniques (display of invoices and photos during interrogation). And finally, this case proved to have all of the necessary action to be classifies as occupational fraud. As stated in the test (pg. 8), Four elements common to these schemes were first identified by the Association of Certified Fraud Examiners in its 1996 Report to the Nation on Occupational Fraud and Abuse, which stated: The key is that the activity (1) is clandestine, (2) violates the employee s fiduciary duties to the organization, (3) is committed for the purpose of direct or indirect financial benefit to the employee, and (4) costs the employing organization assets, revenues, or reserves.
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