The Aadit Report and Internal Control Evaluation

1100 words 5 pages
To: Management From: / Staff Accountant Date: December 19, 2012 Re: Internal Accountant’s Report to Management

This report contains the supporting information to perform a full financial status review of our company, before the upcoming government contract bid. This report will cover the possible impacts that occupational fraud and abuse will have on the company, U.S. Governmental oversight of accounting fraud and abuse, and potential corruption schemes within the company. Impact of Occupational Fraud and Abuse To understand the impact of occupational fraud and
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Those penalties include the following; cease-and-desist orders, credentialed professionals could be disbarred, censored, or suspended, civil or monetary sanctions could be imposed due to non-compliance with anti-fraud ordnances, forfeiture of any bonuses or incentives gained during the commission of fraudulent activities. Depending on the severity of the fraud, criminal prosecution (Mulford & Comiskey, Chapter 4, 2003) Potential Corruption Scheme within a Company There are four major corruption schemes within a company. They are bribery, illegal gratuities, economic extortion, and conflicts of interest (Mulford & Comiskey, Chapter 10, 2003). “Bribery may be defined as the offering, giving, receiving, or soliciting anything of value to influence an official act” (2003, Chapter 10). An example of occupational bribery: One employee to offer another electronics or a “cut” of the profits from selling stolen goods from the docks. In return, the bribed employee would not report the accurate amount received in the docking area, to hide the scheme. (Mulford & Comiskey, Chapter 10, 2003). In illegal gratuities schemes, something of value is given to another employee as a reward for a decision made that was favorable to a person or entity. For instance, a manager contracts with a vendor to become a major supplier for the company. The contracted company’s executive in turn rewards the manager with a cruise, car, and/or