The objective of this assignment is to deepen your understanding of conducting an examination. In this assignment, you will examine the impact of change orders on company performance and their alignment with contractual provisions.
Complete Brief Case #2 on page 112 of your course textbook (Forensic Accounting and Fraud Examination).
Write a 5–7-page paper, including the answers to the questions in the brief case.
Use the following resources to complete this assignment:
Masters-Level Paper Exemplar FRAUD CASEBOOKMary’s Place, Seattle, WARead the following articles or other related articles regarding the Mary’s Place shelter case and then answer the questions below: Sources:Greenstone, S.2021. “More than $800,000 in Seattle homeless funds intended for Mary’s Place shelter may have been stolen, emails show.” The Seattle Times. November 12; KING 5 Staff. 2021. “Scammers steal $831,000 from Seattle’s funding for homelessness.” MSN. November 12.; Greenstone, S and S.G. Taylor. 2021. “As Seattle’s homeless budget grew, officials knew of financial issues years before fraud hit.” The Seattle Times. November 22.Short Answer Questions How many payments were involved in the fraudulent act?To what organization did the city of Seattle believe that it was making payments and what services did the organization provide?Did the city of Seattle reimburse the homeless shelter for the lost monies?At the time of this malfeasance, how large is the city of Seattle’s budget for human services?What federal law enforcement agencies were contacted to assist with the examination of the fraudulent act?Discussion Questions Describe the breakdown that led to this fraudulent act occurring.Describe the means by which this fraud was perpetrated (e.g., “pencil and paper” such as fictitious documents or electronic).Did Mary’s Place’s auditor fail?BRIEF CASESAssume that you have been asked to perform an examination and report on your findings, conclusions, and opinions. Assume the following:The industry is coal mining, transportation, and coal cleaning.The transporter and coal cleaner are one company; the coal mining company is a separate, independent company.The transporter refused to accept cleaning facility at the mine for three months because of quality issues with coal from that well in previous months.The coal produced from the mine was at 60% of capacity during three months for which coal was refused.Case discussion—Consider the following questions: Is it appropriate to examine whether the coal producer’s actions were justified? Why or why not?If coal quality is subjective, is it appropriate to examine coal quality? Why or why not?If coal quality is subject to machine testing and objective metrics, is it appropriate to examine coal quality? Why or why not?Is profitability and cost analysis of the coal mining company during the three-month shutdown relevant? Why or why not?Is profitability and cost analysis of the coal mining company during period before and after the three-month shutdown relevant? Why or why not?Is profitability and cost analysis of the coal mining company during period before and after the three-month shutdown relevant? Why or why not?Assume that you have been asked to perform an examination and report on your findings, conclusions, and opinions. Assume that “change orders” (mutual written agreements to alter an original contract for unforeseen events) has been alleged as interfering with company performance and contractual arrangements clearly provide for additional compensation related to change orders.Case Discussion: Answer the following questions: Name at least four industries that might be affected by “change orders.”Is it appropriate for the forensic accountant/fraud examiner to examine the effect of change orders? Why? Why not?What if contractual provisions state that “the contractor should consider, evaluate and incorporate all aspects that might affect its ability to complete the work on-time and on-budget.” Under those circumstances, is it appropriate for the forensic accountant/fraud examiner to examine the effect of changeovers? Why? Why not?MAJOR CASE INVESTIGATIONIn this chapter, the goal is to focus on the unusual disbursements. The following is the “inventory” of items received to continue the examination at Real Estate Brokers, Inc. Real Estate Brokers, Inc., First Choice Bank account, January 20X9–January 20X0 Check RegisterMemorandum to Case File: Real Estate Brokers, Inc. Withdrawal TransactionsThese items will be provided by the course instructor. Assignment: Continuing to focus on evidence associated with the act, concealment and conversion, use the evidentiary material to continue the investigation. Your primary assignment is to confirm predication with regard to the possible fraud act of embezzlement through cash disbursements by check.
unit 2
This case focuses on analyzing key financial and operational data from two critical areas within the organization: employee records and the accounts payable (A/P) vendor master file. The objective of this examination is to identify significant patterns, trends, or anomalies that could impact organizational performance or indicate areas requiring further investigation.Complete Brief Case #1 on page 199 of your course textbook (Forensic Accounting and Fraud Examination).Write a 5–7-page paper, including the answers to the questions. Use the template to complete this assignment: APA 7 Word Template.Please submit your assignment.
BRIEF CASESAssume that your data analytics examination related to employee records resulted in the following summary table for employees with annual salaries greater than $90,000:Employee Name Social Security Employee Address SalaryJenny Biggs 289-47-1624 229 DiscoveryPlace, Johnsonville,PA 15243 $125,000white cloud 999-99-9999 Weston,PA 15243 $99,999Jackson Jonson 411-85-1524 54320 BeechhurstAvenue, Johnsonville,PA 15244 $95,000Dave Theofour 125-54-7430 1203 Scenic HeightsJohnsonville,PA 15243 $150,000Benji Burns 524-47-5234 10025 SummerWay, Johnsonville,PA 15243 $100,000Assume that your data analytics examination related to the A/P vendor master file resulted in the following summary table for vendors with annual disbursements greater than $150,000: Vendor Name Contact Address Phone # WebsiteBMM, LLC BillMatz 1402 Bentley Street,Johnsonville,PA 15243 412-581-1402 YesHiltonMotels None PO Box 2701,Johnsonville,PA 15243-2701 None noneJim’sPlumbing TommieCarder 229 Discovery Place,Johnsonville, PA 15243 412-792-3642 noneHoppy’s SupplyHouse WendyHopkins 229 Discovery Place,Johnsonville, PA 15243 412-581-1205 NoneJohnsonvilleWater District None 1 Water Street,County Courthouse,Johnsonville, PA 15243 412-824-water Located under Johnsonville City websiteCase discussion: Given this fact pattern, identify up to four anomalies that might be consistent with a red flag associated with fraudulent disbursements, if any, and describe your rationale?Given your answer in case discussion “a,” rank order those in terms of risk and discuss the rationale for your ranking.Assume that the following store employees earn 100% of their payroll income from commissions. All sales have commissions associated with them. Further assume that your data analytics examination of store # 1246 cash registers yielded the following summary:Employee Name # Sales Transactions# Voids# RefundsBilly Bobson 1,00010 (1.0%) 5 (0.5%)Willy Mason 3,00035 (1.2%)90 (3.0%)Ken Jennings 1,10010 (0.9%)10 (0.9%)James Alexander 2,00025 (1.3%)10 (0.5%)Jackson Kelly 20015 (7.5%)10 (5.0%)Store 5-year average – per employee 1,25015 (1.2%)8 (0.64%)Case discussion: Given this fact pattern, which employee’s register data might be consistent with a red flag associated with fraudulent cash register disbursements, if any, and describe your rationale?Given your answer in case discussion “a,” rank order those in terms of risk and discuss the rationale for your ranking.MAJOR CASE INVESTIGATIONThe following is the “inventory” of items received to continue the examination at Real Estate Brokers, Inc. In this chapter, the goal is to focus on the missing deposits: who, what, when, where, and how. Probable Cause MemoKaylee Jones Premium Bank AccountBank statementsDisbursements SummaryMemorandum—Kaylee Jones Bank DepositsThese items will be provided by the course instructor. Assignment: Continuing to focus on evidence associated with the act, concealment, and conversion, use the evidentiary material to continue the investigation. In addition, as the examiner also start to think of terms of who, what (did the person(s) do), when (during what period?), where (physical place, location in books and records), and how (perpetrated, hidden, and did the perpetrator benefit). Your primary assignment is to examine the information and activity in Kaylee Jones’ bank data in terms of what (scheme), how was the act perpetrated, and what benefits are there, if any. As with any data, consider patterns, breaks in patterns, and anomalies. Your focus is what you can conclude from the evidence, understanding that cases are solved, not with an all-telling piece of evidence, the “smoking gun,” but rather by assembling small pieces of evidence into a coherent picture.
unit 3
For this assignment, please address the following:
SAS No. 99: Fraud Considerations
Explain the primary objectives of SAS No. 99 and how it helps auditors in identifying and assessing the risks of fraud during an audit.
Discuss the role of professional skepticism and the key areas auditors should focus on when considering the possibility of fraud.
Evaluate how SAS No. 99 influences the planning phase of an audit, and provide an example of how an auditor might apply the standard in practice to detect financial fraud or irregularities.
SAS No. 113: Audit Sampling
Discuss the main purpose of SAS No. 113 and how it relates to the use of audit sampling in obtaining audit evidence. How does SAS No. 113 help auditors design sampling techniques that are effective and efficient while reducing audit risk?
Determine the challenges auditors face in applying audit sampling and how the guidance in SAS No. 113 can help address these challenges. Include an example of a situation where audit sampling might be used to test for fraud or material misstatements.
Integration of SAS No. 99 and SAS No. 113
Explain how SAS No. 99 and SAS No. 113 can work together to improve the overall effectiveness of an audit. Discuss how auditors can combine the use of audit sampling and fraud risk assessment in their audit strategies to ensure that financial statements are free from material misstatement, whether caused by fraud or error.
Write a 5–7-page paper with references to academic sources, real-world examples, or case studies that demonstrate the application of SAS No. 99 and SAS No. 113 in practice.
ASSIGNMENT 3
Case tableau background: See Chapter 1.The forensic audit has determined that Mon Company is not in compliance with Federal withholding requirements for FICA and Medicare because FICA and Medicare were not withheld from employee paychecks (November 19–23).Question: Can you present this result in a manner that is easy for the CEO, Controller, and Payroll Manager to see the anomaly?Student task: Students should (a) present any payroll disbursements for which social security and Medicare are not being withheld and (b) discuss the finding and recommend investigative next steps.Note: ALL charts now use the Extracted Data. To remove this data extraction, right-click on “Payroll and Sales (Ch 1 Tab…” and click “Use Extract” (this “un-checks” the “Use Extract” option)Student Material for step-by-step screenshots for completing the assignment are available from your instructor.
10. Roger Yu, “Caterpillar Shares Fall after Tax, Accounting Fraud Report,” USA Today, March 8, 2017.
11. J. Edwards, “Trail of Evidence Points to Evangelist in DeKalb Fraud Scheme,” The Atlanta Journal-Constitution, August 26, 2014.
12. Insurance Fraud NEWS, “Leader of West Virginia Crash Ring Pleads Guilty,” May 25, 2017.
13. In addition, an entirely different system is available to juveniles.
14. S. S. Smith, “3 Ways Accountants Can Use Big Data to Fight Fraud,” June 15, 2015, https://www.accountingweb.com/.
15. In addition to SFASs, FASB issues Statements on Financial Accounting Concepts (SFAC); Interpretations, which clarify, explain, or elaborate on FASB Statements, Accounting Research Bulletins (ARB), or Accounting Principles Board (APB) Opinions; Technical Bulletins; Exposure Documents; and Discussion Papers.
16. See M. S. Beasley, J. V. Carcello, D. R. Hermanson, and T. L. Neal, Fraudulent Financial Reporting 1998–2007: An Analysis of U.S. Public Companies (Durham, NC: COSO, 2010).
17. Readers may also want to become familiar with SEC Staff Accounting Bulletin (SAB) No. 99 on materiality and International Auditing and Assurance Standards Board ISA 240, “The Auditor’s Responsibility to Consider Fraud and Error in an Audit of Financial Statements.”
18. Zabihollah Rezaee, Corporate Governance Post-Sarbanes–Oxley: Regulations, Requirements, and Integrated Processes (Hoboken, NJ: John Wiley & Sons, 2007)
Unit 4
The identification and visualization of red flags are critical components of effective fraud detection and examination. The objective is to highlight the importance of recognizing and presenting potential warning signs in a clear, actionable format to support effective decision making and investigation. Complete Brief Case #2 on page 423 of your course textbook (Forensic Accounting and Fraud Examination). Write a 5–7-page paper, including the answers to the questions. Use the Word template to complete this assignment: APA 7 Word Template.
BRIEF CASES The size and weight of moneyAssume that a bad actor has $2,000,000 in $20 U.S. currency. How many $20 bills does the bad actor hold?How much does that weigh?How many U.S. wrappers of $20 currency does that make?If the holder of the $20 bills wanted to down-size the money to $50 bills:How many $50 bills does the bad actor hold?How much does that weigh?How many U.S. wrappers of $50 currency does that make?If the holder of the $20 bills wanted to down-size the money to $100 bills:How many $100 bills does the bad actor hold?How much does that weigh?How many wrappers of currency does that make?Estimate how many brief cases of money are required to hold this currency in $100?Trade-Based Money LaunderingAssume the following facts: As an example, a manufacturer in Brazil needs to purchase twenty industrial robots from a U.S. manufacturer.The manufacturer has Brazilian Real (currency), not U.S. dollars.The manufacturer needs to pay for the robots in U.S. dollars via VenMo.The manufacturer purchases the robots for $1,800,000.00 U.S, delivered to Brazil.The manufacturer takes the Brazilian Real to a black-market money broker instead of a Brazilian bank because s/he buy U.S. dollars cheaper through the broker and avoided Brazilian taxes and tariffs of up to 15%.The money broker buys the $1,800,000 of U.S. dollars in Brazilian Real from the manufacturer and charges a commission.The money broker approaches the Brazilian underworld who has U.S. $1,800,000 from drug transactions on U.S. streets—stuck in the United States.The Brazilian’s U.S. underworld representative pays the manufacturer $1,800,000 in U.S. dollars.Transaction outcome:the manufacturer’s debt to the U.S. robot manufacturer is paidthe drug underworld organization has Reals in Brazilthe broker receives a commission from both.Part A. List in bullet format some of the red flags that an examiner might observe.
Unit 5
Present value calculations are critical in evaluating the financial impact of future income and benefit losses, often used in legal, financial, and insurance contexts to assess damages or compensation. This exercise aims to develop proficiency in applying financial modeling techniques to quantify economic losses, ensuring accuracy and reliability in assessments. By completing this assignment, you will enhance your understanding of present value concepts and their practical application in real-world scenarios.Complete Brief Case #2 on page 537 of your course textbook (Forensic Accounting and Fraud Examination).
BRIEF CASES
Estimate of Fixed and Variable Costs: OverheadFollowing the example in the book, assume that the company represented that overhead was 100% fixed and zero percent variable. The following data are applicable to these assertions. Techniques 1 (graphics) and 3 (regression) are provided.Assignments:
Estimate the fixed and variable portions using the high-low method.
Test the assertion. Using the updated data from techniques 1 and 3 as well as your estimates when applying technique 2, estimate the fixed, variable and variable per dekatherm in the lower matrix.
Draw two conclusions:
Was the company representation accurate?
What is a defensible estimate of variable cost per dekatherm?
Damages from lost employment—Permanent disability
Alex Rockliss was injured in an auto accident on December 31, 2024. She has been deemed by medical and vocational experts to be completely disabled from her ability to complete any kind of employment function. As of the date of her injury, she was earning an annual salary of $100,000 and was scheduled to receive a raise of 2.50%, starting on January 1, 2025. Healthcare costs paid by the employer total $12,000 in 2024 and are expected to rise 4%, starting January 1, 2025.
The insurance company has agreed to compensate her for lost wages and benefits for the year 2025, with one payment each year on the final day of the year (December 31). Her company encourages retirement no later than a person’s 65th birthday and Alex planned to retire on her 65th birthday, January 1, 2050. There are no lost pension benefits, nor lost household services.
The settlement agreement requires that the insurance company place the present value of lost wages and benefits into a trust for distribution at the end of the year.
Other important facts and information are as follows:Economic Damages Assumptions for Alex Rockliss