Case 5.2 Page 145
1. Explain how Heirloom could defraud the bank and how each internal and external party, except the bank, could defraud Heirloom.
2. What risk factor, unusual item, or abnormality would alert you to each fraud?
3. What Control Weaknesses make each fraud possible?
4. Recommend one or more controls to prevent or detect each means of committing fraud.
A. What deficiencies existed in the internal environment at Springers.
B. Do you agree with the decision to settle with the Springers rather than to prosecute them for fraud and embezzlement?
C. Should the company had told Jason and Maria the results of the high-level audit? Why or why not?