And The Fraud Continues- Case 1

1.Discuss the Internal control weaknesses that existed at MCI that contributed to the commission of this fraud The commodious Internal control weaknesses existed at MCI was that Pavlo can manipulate the footfall Receiv competent system which he had helped to create and develop. When the same employee is fit to receive hires, update or manipulate papers due records, or even reconcile the companys bank account, he whitethorn be able to embezzle money from the company (http://smallbusiness.chron.com/strengths-weaknesses-accounts-receivable-35111.html) that was on the dot what move on to MCI with Pavlo, through the following tricks: a)Identifying Account receivables that were waiver to be indite sour and converted them into notes receivable, this way expenses ar not affected and an Asset is created in the balance sheet. b)Unapplied notes was used to mask the bad debt and slow payments, the allocations of a mounts over trustworthy sums of money to overdue or bad receivables, made the expenses link up to the write off of the receivables would not hit the income statement. c)Placeholder assign was used.

If when MCI called customers regarding their overdue account receivables, were told that they were sending in a payment immediately, MCI credited their receivables forwards receiving the cash. Pavlos manipulation of the Account receivable on MCI permit him delayed the inevitable, the recognition of bad debt and risky receivables that would have to be expensed on the income statement. 2.Identify and justify the ap proach you would leave if you venture frau! dulent activity within an organization where you work. If I venture fraudulent activity within an organization where I work, I would us a professional skepticism as a neutral but disciplined approach to catching and investigation. SAS zero(prenominal) 1 suggest that an auditor neither assumes that management is two-handed nor assumes unquestioned honesty. In practice, professional...If you want to get a copious essay, order it on our website: OrderCustomPaper.com

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