Case 8 answer questions

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Answered Same DayMay 01, 2022

Answer To: Case 8 answer questions

Rochak answered on May 02 2022
81 Votes
1. The conditions which are inherent in starting and growing a new company which make it more susceptible to fraud are:
· The first and forem
ost is not doing an audit, this is the most inherent condition because no matter what kind of company it is an audit is something which can reveal all the doings and wrongdoings of the company
· Focusing only on the technology and expansion and not looking at the financials very carefully, and at the same time letting someone else without checking the background manage the financials
2. Fraud Triangle is a popular theory which is used by auditors to identify and explain the reasons why the person who committed the fraud has committed the fraud.
The three components of the fraud triangle are:
· Opportunity
· Pressure
· Rationalization
The component that was the most likely influence for the perpetrator to have committed the embezzlement is Opportunity: The perpetrator had the opportunity because there was no internal control in place, and above that, there was no monitoring which was kept looking out for the financials. It is the opportunity that the three partners let one person manage everything in the company which led to the embezzlement. Also, the three partners gave Porter all the responsibility and made her the signing authority so it provided her with all the possible opportunities to commit the fraud.
3. The internal control environment at...
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