Fraud

Fraud

Introduction

The fraud issue in the given case is disappearance of fur coats from ware. Hendry was the one who made it disappear from inventory. It was not visible in records and physical accounts both. The problem can be detected with comparison of inventory with back up data which is highly confidential and the access to which is only allowed to the owners.

In some cases it is in losses reported in which you can find fraud: They report more losses than the real. If a good administrative control of inputs and outputs is installed than it is almost impossible. That means in a possible fraud, it is precisely to take advantage of the lack of a good control of what enters and what leaves the warehouse. Accounting or paper could report a number of entries less than that actually entered or purchased. The surplus can be separated or showing a value greater than what they actually cost (Miller, 2007). 

Purpose

The purpose of this paper is to find out the origin of the fraud as in how did the fraud occur and the level of damage incurred. The idea is to see exactly how the disappearance of inventory took place.

Background

The case study reveals that Hendry has his eyes in the ware house because he has plans to stealing something from there. He pointed out fur coats to be his target. Hendry stole those fur coats and got them disappear from the inventory.

Scope

I went through extensive online research looking for the kinds of frauds exists in the law. I also gathered some knowledge from some cases retrieved from libraries available.

Results

Such frauds are executed with smart thinking. It is at times impossible to find out the cause of the losses because no evidence is left behind. However, there are certain ways which may turn out to be helpful in such cases. One way is to calculate the simple arithmetic account inflows less outflows, less loss. They must balance otherwise company is supposing having some financial problem. I can say that the main point to look would be the inputs and losses. The outputs must be reported correctly. There must have been certain ways that made the execution of such fraud successful. How it took place is a big question with indefinable answers but I have made some predictions based on the provided information (Maxfield, 2008).

In some way operators must be responsible for direct Extraction of materials from one warehouse to another. Authorization may be taken from output direct material inventory makers in collusion with third parties. This is a job of high level parties to make good relationship with company employees for their beneficial purposes. It can be easily done if one have enough information on offenders movements, facilities and people that make up the operation in the management of inventories and of course stolen goods or vehicles with merchandise. Sales Ghosts might also become a problem for companies. Alteration of document may take place while handling of reports of entry or exit of personnel in charge (Bayens, ...