Fraud Examination Essay Sample

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Review 2-3: Sales skimming schemes leave a victims organization’s books in balance because an employee will make a sale or a service to a customer, collect the payment at the point of sale, but will make no record of the transaction. The employee will then pocket the money received instead of turning it over to the employer.

Discussion 2-4:

In order to prevent this scheme from happening again in the future without having to hire another employee, the owner could have the rental checks delivered to a bank lock box where the checks will be secured rather then to the manager himself.

Review 3-6: The first method used to conceal larceny occurring at point of sale is thefts from other registers. It involves simply taking from someone else’s register. The next method is death by a thousand cuts. Death by a thousand cuts is stealing currency in very small amounts over an extended period of time. The third method is reversing transactions. This is done by reversing transactions such as false voids or refunds. This will cause the register tape to reconcile to the amount of cash on hand after the theft.

The fourth method used to conceal larceny at point of sale is altering cash counts or cash register tapes. This is done by altering the cash counts from the register to match the total receipts reflected on the register tape, or instead of altering cash counts, manually altering the register tapes. The last method that is used to conceal larceny at point of sale is to destroy the register tapes. By not being able to make the cash and the tape balance, the best thing to do is destroy the register tape to prevent others from discovering the imbalance.

Discussion 3-8

Newfund’s management and accounting controls contributed to the detection of Gurado’s fraud scheme by performing surprise audits once or twice a year. This scared Gurado and lead him to confess because he was unable to pay back his debts before they found out. By having upper management spread the word of what happened with Gurado, and expressing to others how you will get caught when committing fraud through audits, it helped to deter future frauds.

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