Question: Detecting red flags is important because effective internal controls should provide for a specific approach for monitoring financial statements (and the base transactions below the

Detecting red flags is important because effective internal controls should provide for a specific approach for monitoring financial statements (and the base transactions below the consolidated statements) on an ongoing basis. Please explain the following:

A business unit comprises 15 manufacturing plants globally, which roll up into consolidated business unit financials for which Jorge is responsible. As a result, Jorge was tasked with monitoring the financial results of the entire business unit, which entails ensuring that there are no fraudulent activities rolling up through the company's financial statements.

1. How Jorge would react if he noticed potentially questionable activity in one of his plants?

2. What should Jorge do to investigate and address the issue?

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