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 round Receiv competent system which he had helped to create and develop. When the same employee is adequate to(p) to receive compensations, update or manipulate papers due 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 precisely what move on to MCI with Pavlo, through the following tricks: a)Identifying Account receivables that were discharge to be indite sour and converted them into notes receivable, this way expenses are not affected and an Asset is created in the balance sheet. b)Unapplied gold was used to mask the bad debt and slow payments, the alloc ations of amounts over authoritative sums of money to overdue or bad receivables, made the expenses relate 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 uncollectible receivables that would have to be expensed on the income statement. 2.Identify and justify the approach you would lodge in if you venture fraudulen t 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 staining and investigation. SAS zero(prenominal) 1 suggest that an auditor neither assumes that management is double-tongued nor assumes unquestioned honesty. In practice, professional...If you want to get a be essay, order it on our website: OrderEssay.net

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