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 big Internal control weaknesses existed at MCI was that Pavlo can manipulate the value Receiv competent system which he had helped to create and develop. When the same employee is subject to receive honorariums, update or manipulate papers receivable 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 exactly what move on to MCI with Pavlo, through the following tricks: a)Identifying Account receivables that were passing to be indite sour and converted them into notes receivable, this way expenses atomic number 18 not affected and an Asset is created in the balance sheet. b)Unapplied interchange was used to mask the bad debt and slow paymen ts, the allocations of amounts over received sums of money to overdue or bad receivables, made the expenses related to to the write off of the receivables would not hit the income statement. c)Placeholder attribute 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 forged receivables that would have to be expensed on the income statement. 2 .Identify and justify the approach you would! tax return if you venture fraudulent 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 undercover work and investigation. SAS zero(prenominal) 1 suggest that an auditor neither assumes that management is deceitful nor assumes unquestioned honesty. In practice, professional...If you want to get a liberal essay, order it on our website: OrderCustomPaper.com

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