FRAUD AND INTERNAL CONTROL

Instructions: Study the fraud case that starts on page 3 carefully. Then write concise answers to the following questions regarding the Fraud and Internal Control Systems of Duarf, Inc. Clearly label your responses with proper headings and subheadings. Be very specific and precise. Answers that appear to be beating around the bush will not get any credit. Total credit for this case study project will be 40 points.

1. What are the controls in place that under normal conditions should function well to prevent embezzlements or frauds? Identify and list (enumerate distinctly) at least 5 strengths and explain what potential problem(s) each control helps to prevent. (You must separately identify each to get proper credit. Hint: existing preventive measures)

2. What are the additional control strengths of the system that may help uncover problems or deter frauds? Identity and list (enumerate distinctly) at least three. Did they work? (Hint: existing detective measures for on-going events)

3. What are the weaknesses in the system? Identify and list (enumerate distinctly) at least three points. For each control weakness you have identified, please suggest a way to overcome.

4. From the human behavior perspective, why did the system fail? Give at least two distinct reasons. What lesson can you learn from this failure? Feel free to add any additional comments concerning the fraud. (Hint: may be helpful to refer from textbook chapter 1 concepts)

5. We have learned many Computer Audit Tests related to various types of schemes. If you were a CFE and hired to investigate this Duraf case immediately after the hotline report, what are the necessary Computer Audit Tests that you will be performing to well examine and prepare the proper evidence for this fraud case? Please also justify your purpose.

6. Do you have any suggestions/comments to help re-design and/or re- enforce Duraf current internal control systems? Please details your suggestions to convince CEO and Board of Directors to implement. (Hint: segregation of duties, independent checks, etc. if you find it applicable)

Note 1: Be specific in supporting your points. For example, simply stating that the companys segregation of duties appear satisfactory as a strength will receive NO credit. You must clearly articulate which duty is segregated from what other duties and how this segregation helps to strengthen the companys internal control. Page limit is 8, standard margin, Times New Roman 12 font.

Gmail.4G 8:08 PM 4 headings and subheadings Be very specific and precise. Answers appear to be beating around the bush will not get any credit. Total credit or this case study project will be 40 points 1. What are the controls in place that under normal conditions should function well to prevent embezzlements or frauds? Identify and lst (enumerate distinctly) at least 5 strengths and explain what potential problem(s) each control helps to prevent (You must separatcly identify each so get proper credit. Hint: cxisting preventive aes 2. What are the additional control strengths of the system that may belp uncover problems or deter frauds? Identity and list (enumerate distinctly) at least three. Did they work? Hint: existing detective measures for on-going events . What are the weaknesses in the system? Identify and list (enumerate distinctly) at least three points. For cach control weakness you have identified, please suggest a way to overcome 4. From the human bchavior perspective, why did the system fail Give at least two distinct reasons. What lesson can you lcarm from this failure? Feel free to add any additional comments concerning the fraud. (Hint: may be helpful to refer from texthook chapter I conoqtsj 5. We have leaned many "Computer Audit Tests related to various typcs of schemes. Ifyou were a CFE and hired to investigate this Duraf case immediately after the hotline report, what are the necessary Computer Audit Tests that you will be performing to wel examine and prepare the proper evidence for this fraud case? Please also justify your purposc. 6. Do you have any saggestionscomments to help re-design and or re- enforce Duraf current internal control systems? Please details your suggestions to convince CEO and Board of Directors to implement (Hin: segregation of duties, independent checks, elc. if you find i applicable) Note 1: Be specifie in supporting your points For example, simply stating that "the company's segregation of duties appear satisfactory as a strength will receive NO credit. You must clearly articulate which duty is segregated from what other duties and how this segregation helps to strengthen the company's internal control. Page limit is 8, standard margin, Times New Roman 12 foet Note 2: This is an individual project assignment. You oaline D2L submission for this case study analysis is Sunday evening of October 28, 2018 Gmail.4G 8:08 PM 4 headings and subheadings Be very specific and precise. Answers appear to be beating around the bush will not get any credit. Total credit or this case study project will be 40 points 1. What are the controls in place that under normal conditions should function well to prevent embezzlements or frauds? Identify and lst (enumerate distinctly) at least 5 strengths and explain what potential problem(s) each control helps to prevent (You must separatcly identify each so get proper credit. Hint: cxisting preventive aes 2. What are the additional control strengths of the system that may belp uncover problems or deter frauds? Identity and list (enumerate distinctly) at least three. Did they work? Hint: existing detective measures for on-going events . What are the weaknesses in the system? Identify and list (enumerate distinctly) at least three points. For cach control weakness you have identified, please suggest a way to overcome 4. From the human bchavior perspective, why did the system fail Give at least two distinct reasons. What lesson can you lcarm from this failure? Feel free to add any additional comments concerning the fraud. (Hint: may be helpful to refer from texthook chapter I conoqtsj 5. We have leaned many "Computer Audit Tests related to various typcs of schemes. Ifyou were a CFE and hired to investigate this Duraf case immediately after the hotline report, what are the necessary Computer Audit Tests that you will be performing to wel examine and prepare the proper evidence for this fraud case? Please also justify your purposc. 6. Do you have any saggestionscomments to help re-design and or re- enforce Duraf current internal control systems? Please details your suggestions to convince CEO and Board of Directors to implement (Hin: segregation of duties, independent checks, elc. if you find i applicable) Note 1: Be specifie in supporting your points For example, simply stating that "the company's segregation of duties appear satisfactory as a strength will receive NO credit. You must clearly articulate which duty is segregated from what other duties and how this segregation helps to strengthen the company's internal control. Page limit is 8, standard margin, Times New Roman 12 foet Note 2: This is an individual project assignment. You oaline D2L submission for this case study analysis is Sunday evening of October 28, 2018