Fraud risk and prevention

Option #1: Fraud Risk and Prevention

Paul Gallagher recently purchased a new business that included a small 18-room motel and coffee shop. Paul lives six hours away and cannot run the business himself. He will only be able to visit periodically and check in on it. He hires a young couple, Jim and Pamela, to run the business. The agreement includes living quarters in a small apartment behind the motel office where the couple will live for free. They will receive a monthly salary as well. Jim and Pamela will be in charge of running the daily operations of the motel and the coffee shop. Their responsibilities also include hiring and supervising four or five part-time employees. These part-time employees help with cleaning rooms, cooking, and taking and making coffee orders at the coffee shop.

Jim and Pamela will also maintain records of rooms rented, meals served, and payments received, including method of payment (cash, check, or credit card). They will make weekly deposits of the business proceeds at the local bank. Paul anticipates being able to visit the business and review records and operations about once every 6-8 weeks.

In a well-written paper, address the following two questions:

  • What concerns are raised about possible fraud on the part of the couple?
  • For each concern, identify a possible control that could reduce the risk of fraud.

Adhere to the following standards:

  • The paper should be 3-4 pages in length, not counting the title or references pages, which must be included.
  • Review the grading rubric, which can be accessed from the Course Information page.
  • Be sure to follow the CSU-Global Guide to Writing and APA Requirements.
  • The paper should include an introduction, a body with at least two fully developed paragraphs, and a conclusion.
  • Support your interpretation with evidence from the textbook and a minimum of one peer-reviewed journal article, other than the articles from this module’s required readings. It’s helpful to search for articles from the CSU-Global Library.

Readings

http://www.theibfr.com/ARCHIVE/ISSN-1941-9589-V10-N1-2015.pdf

https://search-ebscohost-com.csuglobal.idm.oclc.org/login.aspx?direct=true&db=aph&AN=100094001&site=ehost-live

Textboo

Albrecht, W. S., Albrecht, C. O., Albrecht, C. C., & Zimbelman, M. F. (2015). Fraud examination. Mason, OH: South-Western Cengage Learning. ISBN-13: 9781305079144

 
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