Coupon Accounting Abuse Essay

The incentive, opportunity, and rationalization to commit cunning have plagued business organizations for many years. There ar numerous ways that passenger vehicles and employees lowlife commit drool. This makes it a necessity for businesses to have quality congenital comptrollers that help prevent playerulent activity. However, even with the best set of controls businesses are still susceptible of joke. This paper will concent govern on the show window study concerning coupon accounting abuse and will answer questions pertaining to attach to controls, ways to prevent coupon abuse, parties who may be harmed, and the type of fraud presented in the case.Coupon Accounting Abuse wonder 1 talk over whether the placement described can happen to a friendship with a unplayful control environment. It is imperative for a accompany to have good accounting internal controls. A company that has a good control environment will help deter fraud, but these controls can hardly provi de a company with reasonable assurance. In this situation the bulls eye theatre director is committing the fraud. This would make it very hard even for a company with good controls to detect fraud. In what is known as management override, managers can simply circumvent a companys internal controls.Question 2 Describe any steps a company could topic to prevent such abuse. There are many steps that a company can take to prevent fraud abuse. A company should implement a strong code of ethics policy. Every manager and employee should be trained and very aware of the policy. This will help in maintaining the integrity of the workforce. There should be a strong screening surgical operation that includes background checks to help ensure the company is hiring honest employees. There should overly be a segregation of duties.In this case the brand manager has complete control over estimating the coupon liability. This estimate should be canonic by another manager at the company. The comp any should inform freelance and internal auditors of the significance that coupons can have on the companys fiscal statements. A risk management group should be realised whose task is to facilitate and co-ordinate the over completely risk management process. Depending on the size and nature of the organization, the risk management group may be in the form of a committee who meet from term to time (CIMA, 2009).Question 3 List those parties who might be harmed by this situation. histrion is often mistakenly envisioned a victimless crime. However, fraud can have big social and psychological effects on individuals, businesses and society (CIMA, 2009). In this situation the brand manager is harming multiple parties. When the manager replaces the 4% estimated redemption rate with 2% he is increasing revenue making the company explore more profitable than it really was.This is misleading to managers and shareholders who are reading the financial statements. It could be detrimental t o the business if managers think a brand is doing demote than it really is. The shareholder will also be impacted in the coming year because of the added liability expenses. The brand manager is putting himself at risk to be harmed because if he is caught his job will be all over and he will be prosecuted. Question 4 Do you consider this example to be management fraud or employee fraud?I consider this to be management fraud. Management fraud often involves cured or high level managements intentional refutation of financial statements, theft or improper use of accompany resources. Employee fraud involves a non-senior employee theft or improper use of company resources (Gottlieb, 2011). The fraud that was committed was by the brand manager who developed a ill-considered view and knew that he would be managing another brand in the near year. This situation is becoming increasingly common in the workplace.In ordering to combat fraud and white collar crime in businesses, a concerte d effort must be exerted by the management of the business, the outer auditors, and by all employees of the business. Everyone must realize that fraud is not a victimless crime. The cost of fraud and theft are shared by all through higher costs and lower corporate profits. Through commensurate internal controls by management, better working environments for employees, more stringent requirements for outer auditors, and codes of ethics for employees, everyone can start to combat frauds and defalcations within corporate the States (Farrell, Franco, 1999).