Los Angeles Internal Controls and Fraud Case
This case study is designed to expose students to a variety of conditions that may or may not indicate a fraud has been committed. Consideration must be given to errors that are present in a normal business environment, internal control weakness accepted by management, as well as obtaining an understanding of procedures and their long-range effect on business. Control weaknesses by themselves are not major problems. The combination of the control weaknesses, coupled with the inexperience of the internal auditor and a limited audit budget present real life situations. Students need to understand the overall control environment and not just deal with individual procedure errors.
Control weaknesses by themselves are not major problems. The combination of the control weaknesses, coupled with the inexperience of the internal auditor and a limited audit budget present real life situations. For example, does the auditor know when to expand an audit test, discontinue tests, and ask for additional data? What information is needed, who should respond, and what reliability should be placed on the information? Does the auditor know what is necessary to support an audit recommendation or, more importantly, to provide evidence in a criminal case?
Please read all of the requirements carefully and make sure your paper addresses each item. It would be helpful for your own use to develop a high-level process map. A rough guideline to adequately complete the assignment is 5-6 single-spaced pages.
Please carefully read the instructions and the case study.
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