While conducting the investigation on Biloxi, it has come to the attention of the auditors that there are red flags present within the company. The primary red flag is seen within the company’s mission statement, “Mutual dependence toward mutual success.” This mission statement is too broad and does not incorporate protocols or procedures that employees are to abide by. In, addition the employees do not have a code of ethics to follow, which includes the negative effects of fraud and the aftermath it may cause to the company as a whole. With the continuation of an internal review it was noticed that the company was operating well until 2014 and 2015. Contracts were declining in Louisiana, however the decline did not account for the vast monetary
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Hiltz mentioned that the accounting department was run by only two employees whilst the company had over 1,000 employees. The low number of employees was due to cost cutting that was mentioned in an inter-office email. CEO Hiltz mentioned that Biloxi was entering an austerity program and this would include layoffs, salary reductions, and a cease on hiring. This announcement made in 2013 is a red flag because it encompassed one element of the Fraud Triangle. The fraud triangle consists of three elements; pressure, opportunity and rationalization. The layoffs and salary cuts provide the pressure element, because the need for money is the motivation to commit …show more content…
This is a red flag when it comes to investigating fraud because it is statistically shown that employees who commit fraud rarely take vacations because they do not want any other employee to review their work and they prefer to be in the office to know when any audits are taking place. As for Ms. Evelyn Mason, she is the single person that is responsible for Biloxi’s acquisition. Once again, this level of trust can lead to the opportunity to commit fraud. Mason is also known to mysteriously help the company when profits are not shown. After the interview of the CEO the investigator interviewed Biloxi workers and found out that the two accounting workers have very distinct lifestyles. Mr. Perkins is an individual that keeps to himself and does not take days off of work, whilst Ms. Mason transformed from a shy individual to one that is very lively and speaks of luxurious vacations. Both descriptions relate to those of individuals that have committed fraud. People that commit fraud are in a constant state of insecurity and have the fear of being caught. Therefore, they rarely leave the office and do not take vacations for the fear that someone may take their daily tasks and find something unusual. As for the change in personality and the bragging of trips, this is another red flag of fraud because the individual prior to this change did not have the funds or
Hiltz mentioned that the accounting department was run by only two employees whilst the company had over 1,000 employees. The low number of employees was due to cost cutting that was mentioned in an inter-office email. CEO Hiltz mentioned that Biloxi was entering an austerity program and this would include layoffs, salary reductions, and a cease on hiring. This announcement made in 2013 is a red flag because it encompassed one element of the Fraud Triangle. The fraud triangle consists of three elements; pressure, opportunity and rationalization. The layoffs and salary cuts provide the pressure element, because the need for money is the motivation to commit …show more content…
This is a red flag when it comes to investigating fraud because it is statistically shown that employees who commit fraud rarely take vacations because they do not want any other employee to review their work and they prefer to be in the office to know when any audits are taking place. As for Ms. Evelyn Mason, she is the single person that is responsible for Biloxi’s acquisition. Once again, this level of trust can lead to the opportunity to commit fraud. Mason is also known to mysteriously help the company when profits are not shown. After the interview of the CEO the investigator interviewed Biloxi workers and found out that the two accounting workers have very distinct lifestyles. Mr. Perkins is an individual that keeps to himself and does not take days off of work, whilst Ms. Mason transformed from a shy individual to one that is very lively and speaks of luxurious vacations. Both descriptions relate to those of individuals that have committed fraud. People that commit fraud are in a constant state of insecurity and have the fear of being caught. Therefore, they rarely leave the office and do not take vacations for the fear that someone may take their daily tasks and find something unusual. As for the change in personality and the bragging of trips, this is another red flag of fraud because the individual prior to this change did not have the funds or