Fraud Symptoms
Even though Walker successfully concealed her theft for a long time, some red symptoms of fraud still could be noticed if we pay closer attentions as follow:
Higher amount of sales returns every time the embezzler works
In a retail store, the amount of sales return generally is relatedly stable since the store has sales operation control. Assumed the fact that during the period which Walker committed fraud, every time when Walker worked, the number or amount of sale returns significantly increased and the sales return percentage ratio much higher than its average level. This unexpected change may be considered a red flag.
Lake of Proper Authorization
While faking returns, Walker was the only person who processed these transactions. …show more content…
However, when Walker created fake returns, only cash decreased but the physical return items were missing since no real return had occurred. It could be a red flag to the store if people paid attention to the physical return items.
Behavior changed
“She would be the one that would come in and help us and go, “Oh, you need to punch this number and this, ’ or ‘Let me find it for you,’” said Detective Gerald Wright. Assumed that Walker was the trusted and nicest employee in the store but she showed periods of unexplained anger recently revealed by other employees in the store.
Proactive Approaches
Once the red flags have been identified, further technical analysis should be taken to detect the fraud. Thanks to the digital database development, the auditor could more efficiently obtain the operating data of the store and detect the fraud physically and digitally. In this case, the auditor could uncover the fraud by analyzing financial records and counting physical returns items and inventory and analyzing time …show more content…
In the meantime, horizontal analysis shown that from January 2013 to October 2014 the sales returns and allowances increased and the net income declined significantly. Assumed that during January 2013 to October 2014 the accounts that could affect revenues were relatedly stable except for the sales returns and allowances account and there was no special manufacturing problems that could cause increasingly sales returns, therefore, it should be a
Even though Walker successfully concealed her theft for a long time, some red symptoms of fraud still could be noticed if we pay closer attentions as follow:
Higher amount of sales returns every time the embezzler works
In a retail store, the amount of sales return generally is relatedly stable since the store has sales operation control. Assumed the fact that during the period which Walker committed fraud, every time when Walker worked, the number or amount of sale returns significantly increased and the sales return percentage ratio much higher than its average level. This unexpected change may be considered a red flag.
Lake of Proper Authorization
While faking returns, Walker was the only person who processed these transactions. …show more content…
However, when Walker created fake returns, only cash decreased but the physical return items were missing since no real return had occurred. It could be a red flag to the store if people paid attention to the physical return items.
Behavior changed
“She would be the one that would come in and help us and go, “Oh, you need to punch this number and this, ’ or ‘Let me find it for you,’” said Detective Gerald Wright. Assumed that Walker was the trusted and nicest employee in the store but she showed periods of unexplained anger recently revealed by other employees in the store.
Proactive Approaches
Once the red flags have been identified, further technical analysis should be taken to detect the fraud. Thanks to the digital database development, the auditor could more efficiently obtain the operating data of the store and detect the fraud physically and digitally. In this case, the auditor could uncover the fraud by analyzing financial records and counting physical returns items and inventory and analyzing time …show more content…
In the meantime, horizontal analysis shown that from January 2013 to October 2014 the sales returns and allowances increased and the net income declined significantly. Assumed that during January 2013 to October 2014 the accounts that could affect revenues were relatedly stable except for the sales returns and allowances account and there was no special manufacturing problems that could cause increasingly sales returns, therefore, it should be a