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Internal Accountant's Report to Management

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You are the internal accountant at a company that is preparing for an upcoming government contract bid. The management in your company is deciding if it is necessary for the company to perform a full financial status review prior to the bid. As an internal accountant, prepare a report for management that provides supporting information for a full financial status review prior to the bid. Include the following sections:

- Section I: The impact of occupational fraud and abuse on the company.
- Section II: U.S. governmental oversight of accounting fraud and abuse and its affect on the company.
- Section III: Potential corruption schemes to be aware of within the company.
- Section IV: Recommendation of types of accounting evidence and methods of gathering such evidence to support the financial status review.

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This answer provides you an excellent discussion on Internal Accountant's Report, including discussions of fraud impact on a company, increasing rates of fraud being overlooked by the government, types of corruption within the company, and evidence to review the accounting and financial status of the company.

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Internal Accountant's Report to Management
You are the internal accountant at a company that is preparing for an upcoming government contract bid. The management in your company is deciding if it is necessary for the company to perform a full financial status review prior to the bid. As an internal accountant, prepare a report for management that provides supporting information for a full financial status review prior to the bid. Include the following sections:

- Section I: The impact of occupational fraud and abuse on the company.
The impact of occupational fraud and abuse on the company can be devastating. It can reduce the revenues of the company, eat into the cash flows and can turn profits into losses. There are several ways in which occupational fraud and abuse can be carried out.

Some of the common methods are fraud schemes that are carried out by the purchasing department. The most financially harmful frauds are those that are carried out in collusion. At an average a firm loses 5% of its revenue to fraud. Misappropriation of cash is the most common type of occupational fraud and abuse that is carried out in companies. Corruption is the next most common type of occupational fraud and abuse that can be carried out. This can devastate the performance of the company.

Some of the most common type of occupational fraud and abuse that can be carried out are cash larceny, skimming, billing and payroll schemes, expense reimbursement, and check tampering, and register disbursement schemes. There are several type of occupational fraud and abuse can be carried out under the category of corruption. These include bribery, illegal gratuities, extortion, and conflict of interest. Each of these frauds will not only dry up the cash resources of the company but will reduce its profits.

Non-cash fraud that may be carried out includes inventory fraud, misuse of non cash assets, misuse of non-cash assets and targeting of intangible assets. There are several examples of non-cash fraud that can cost ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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