The fraud triangle identifies conditions or circumstances that are often precursors to financial fraud. 1)Define the three
Question:
The fraud triangle identifies conditions or circumstances that are often precursors to financial fraud.
1)Define the three categories of fraud risk factors that are included in the fraud triangle and provide specific examples of each.
2. Using the fraud triangle, identify fraud risk factors that were present in the Le-Nature's case. What implications did these factors have for the reliability of Le-Nature's accounting and financial reporting process?
3. The Committee of Sponsoring Organizations of the Treadway Commission (COSO) internal control framework identifies the five principal components that should be present in an organization's system of internal control. Name and briefly describe each of those components.
4. Relying on the COSO framework, identify specific flaws that were present in Le-Nature's internal control. How were principles of COSO's internal control framework violated by Podlucky and his co-conspirators? How did the deficiencies in Le-Nature's internal controls contribute to the failure of third parties (including Wachovia, leasing companies, and the company's independent auditors) to uncover the Le-Nature's fraud?
5. What stakeholders were negatively affected by LeNature's lack of internal controls and its leaders' criminal behavior? How so?
6. Identify specific work roles assumed by management accountants in business organizations and explain how the individuals occupying those roles contribute to internal controls, fraud prevention, an ethical climate and thus to good overall corporate governance.
7. Several accountants or individuals with accounting backgrounds were involved in the Le-Nature's debacle. These individuals included Higbee, Lipovich, Andreycak, Podlucky, Podlucky's son Jesse, and the individuals assigned to the Pascarella & Wiker investigative team. Evaluate the overall professionalism of each of those individuals by applying the four standards discussed in the IMA Statement of Ethical Professional Practice that can be found at www.imanet. org/docs/default-source/press_releases/statement-ofethical-professional-practice_2-2-12.pdf?sfvrsn=2.
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg