Integrated Cases Chapter 5
CHAPTER 5: Integrative Case- Northwest Industries
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Date: December 3, 2011
Information Management
Immediate Issues or Problems
* Is there an existing fraud in the payroll system of Northwest Industries? * What courses of action should be done by Northwest Industries to prevent and detect fraud?
Basic Issues or Associated Issues
* All of the 1,500 company employees of Northwest Industries had a discrepancy between their reported withholding and the actual amount withheld. * The W-2 of Don Hawkins, a programmer in charge of the payroll system, showed that thousands of dollars more in withholdings had been reported to the IRS than had been withheld from his paycheck * What are the factors that motivate to commit fraud?
Issue Analysis or Information Summary
Issue Analysis or Information Summary
Issue Analysis or Information Summary
Our society has become increasingly dependent on accounting information system, which have grown increasingly more complex to meet our escalating needs for information. As system complexity and our dependence on system increase, companies face the growing risk of their systems being compromised. Managers should be alert to the possibility that unusual events or transactions could be symptoms of fraud or attempted fraud. Fraud may also be highlighted as a result of specific management checks or be brought to management’s attention by a third party. Fraud takes two forms: misappropriation of assets and fraudulent financial reporting, either the two fraud has a harmful effect in the overall organization. There are three present conditions when fraud occurs. First is pressure that motivates a person to commit fraud. Second is Opportunity that allows a person due to situation to commit and conceal fraud. Third is rationalization that allows perpetrators to justify their illegal behavior. Prevention is the key to make fraud less likely to occur. During the latter part of the year, the
N
Date: December 3, 2011
Information Management
Immediate Issues or Problems
* Is there an existing fraud in the payroll system of Northwest Industries? * What courses of action should be done by Northwest Industries to prevent and detect fraud?
Basic Issues or Associated Issues
* All of the 1,500 company employees of Northwest Industries had a discrepancy between their reported withholding and the actual amount withheld. * The W-2 of Don Hawkins, a programmer in charge of the payroll system, showed that thousands of dollars more in withholdings had been reported to the IRS than had been withheld from his paycheck * What are the factors that motivate to commit fraud?
Issue Analysis or Information Summary
Issue Analysis or Information Summary
Issue Analysis or Information Summary
Our society has become increasingly dependent on accounting information system, which have grown increasingly more complex to meet our escalating needs for information. As system complexity and our dependence on system increase, companies face the growing risk of their systems being compromised. Managers should be alert to the possibility that unusual events or transactions could be symptoms of fraud or attempted fraud. Fraud may also be highlighted as a result of specific management checks or be brought to management’s attention by a third party. Fraud takes two forms: misappropriation of assets and fraudulent financial reporting, either the two fraud has a harmful effect in the overall organization. There are three present conditions when fraud occurs. First is pressure that motivates a person to commit fraud. Second is Opportunity that allows a person due to situation to commit and conceal fraud. Third is rationalization that allows perpetrators to justify their illegal behavior. Prevention is the key to make fraud less likely to occur. During the latter part of the year, the