Competencies
In this project, you will demonstrate your mastery of the following competencies:
- Analyze the impact of fraud schemes on an organization
- Evaluate methods to detect and prevent fraud
- Describe fraud examination procedures based on regulations and professional standards
Overview
For this project, you will read both the attached docket and spreadsheet in the Supporting Materials section and then create a fraud examination report for Indigo Textiles and Fabrics.
Scenario
You are a forensic accountant, and your manager has given you the task of compiling a fraud report for this fraud examination; they only want you to write sections pertaining to background, findings, and summary. You will explain your role as a forensic accountant and the importance of following specific guidelines. You will then analyze the information in the case study, describe the fraud, and provide recommendations to reduce the risk of this type of fraud occurring in the future.
Directions
For this project, you will use the case study in the Supporting Materials section, along with your prior knowledge, to create a fraud report. You will create the following sections of a fraud report: background, findings, and summary.
Section One: Background
Using the case study and prior knowledge, provide background information on your role and the case.
Specifically, you must address the following:
- Explain the relevance of the procedural role of the forensic accountant in this specific fraud examination.
- Outline which fraud schemes could impact the organization during this specific fraud examination.
- Describe the relevancy of implementing internal controls in the organization.
- Apply the components of COSO’s framework to internal controls in this specific fraud examination.
- Explain the ethical considerations in this specific fraud examination.
Section Two: Findings
Using the case study, you will analyze the fraud that has occurred and its impact on the organization.
Specifically, you must address the following:
- Assess the validity of predication in this fraud examination.
- Determine the type of fraud that has occurred in this fraud examination.
- Analyze the rationale for evidence that supports the fraud claim. Consider the following in your response:
- Trend analysis, benchmarking, and reasonableness
- Forensic red flags
- Data discrepancies
- Apply the fraud triangle to this fraud examination. Include the following in your response:
- Opportunity
- Rationalization
- Pressure
- Describe the scope of this fraud scheme.
Section Three: Summary
Using the case study, explain the consequences of the committed fraud and provide recommendations for the future of this fraud examination.
Specifically, you must address the following:
- Determine how a proper internal control structure could be used in fraud detection for this examination.
- Determine which internal controls would have been effective in the prevention of fraud.
- Explain the potential consequences if this fraud examination were to be covered by civil law.
- Explain the potential consequences if this fraud examination were to be covered by criminal law.
- Recommend which appropriate regulatory entities need to be alerted to this fraud.
What to Submit
To complete this project, you must submit the following:
Fraud Report Your submission should be a 7- to 9-page Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style.
Supporting Materials
The following resources support your work on the project:
Resource: Indigo Textiles and Fabrics Case Study Docket This Word document will clarify the background, the characters, and other information needed to complete the fraud report.
Resource: Indigo Textiles and Fabrics Case Study Spreadsheet
This Excel spreadsheet will provide the financial data needed to complete the fraud report.