Internal Accountant’s Report to Management
Internal Memorandum to Management
Jeff Jeffcoat
ACC/566
February 3, 2014
Jacqueline Pierson
Internal Memorandum to Management
In preparation for our upcoming government contract, it is imperative that we perform a full financial status review. There is good reason for this. We will have to make representations and warranties to the government that are strict and enforceable. These representations and warranties are made by our company to establish credibility in the eyes of the largest consumer of goods and services in the US economy. The purpose of the full financial review is:
To find any possibility of occupational fraud. If we cannot any evidence of occupational fraud.
If there is evidence of possible occupational fraud, then we need to establish a plan to address the issue and find the source of the problem.
Solve the case of occupational fraud, estimate damages, and estimate amount we will return to operating income and net income from solving any fraud issues we have.
The stakes have never been higher. As a profitable entity with substantial operations, we are a lightning rod for possible fraud. As the US Government is very concerned with our ability to be a going concern and a healthy financial entity, if we have fraud in our operations, this is materially affecting our operations as every dollar of fraud reduces our net income by the same dollar (a one for one ratio of losses to our organization).
First, let’s define occupational fraud. Occupational fraud has many faces. Employees padding time sheets, employees receiving kickbacks from vendors, employees skimming from the register are some of the examples of occupational fraud. Essentially, occupational fraud is the ripping off of the company from sources within the company.
Now, let’s discuss the potential effect of occupational fraud on our company. The association of certified fraud examiners points out that the typical fraud lasts over 18 months that the median loss
Jeff Jeffcoat
ACC/566
February 3, 2014
Jacqueline Pierson
Internal Memorandum to Management
In preparation for our upcoming government contract, it is imperative that we perform a full financial status review. There is good reason for this. We will have to make representations and warranties to the government that are strict and enforceable. These representations and warranties are made by our company to establish credibility in the eyes of the largest consumer of goods and services in the US economy. The purpose of the full financial review is:
To find any possibility of occupational fraud. If we cannot any evidence of occupational fraud.
If there is evidence of possible occupational fraud, then we need to establish a plan to address the issue and find the source of the problem.
Solve the case of occupational fraud, estimate damages, and estimate amount we will return to operating income and net income from solving any fraud issues we have.
The stakes have never been higher. As a profitable entity with substantial operations, we are a lightning rod for possible fraud. As the US Government is very concerned with our ability to be a going concern and a healthy financial entity, if we have fraud in our operations, this is materially affecting our operations as every dollar of fraud reduces our net income by the same dollar (a one for one ratio of losses to our organization).
First, let’s define occupational fraud. Occupational fraud has many faces. Employees padding time sheets, employees receiving kickbacks from vendors, employees skimming from the register are some of the examples of occupational fraud. Essentially, occupational fraud is the ripping off of the company from sources within the company.
Now, let’s discuss the potential effect of occupational fraud on our company. The association of certified fraud examiners points out that the typical fraud lasts over 18 months that the median loss