You are the auditor with final responsibility for an audit of a Fortune 500 company, which is about to start. As required by SAS 99, you are required to brainstorm among the audit team “about how and where they believe the entity’s financial statements might be susceptible to material misstatement due to fraud, how management could perpetrate and conceal fraudulent financial reporting, and how assets of the entity could be misappropriated.”
For the discussion posting, you are required to select one of the following companies to discuss:
Technology – Google, Facebook
Design/Manufacturing – Apple, Nike
Finance/Banking – Goldman Sachs, HSBC
Insurance – GEICO, United Health
Retail – Walmart, CVS
Communication – AT&T, British Telecom
Using the company you selected, answer the following questions:
1. If fraud were to occur in our organization, where would it most likely happen?
2. Which of our employees are in the best positions to commit fraud against the company?
3. If each of these possible frauds were to occur in our company, what kinds of symptoms would they generate?
Please review the SAS #99 document, paragraphs 14 – 18, to obtain an idea of what is required for brainstorming. The document is attached.
The fraud must be specific to the company or industry you selected. It cannot be a broad list of red flags or frauds. Within your brainstorming posting, you must provide your logic behind the type of fraud(s) that you believe will mostly likely occur given the company or industry. The more details the better.
There is no specific requirement for the # of sources and they all can be from the internet.