Fraud Risk Factors

Fraud Risk Factors

Fraud is a serious concern for any organization. The case study in this week’s Required Resources shows how fraud not only can cheat shareholders and customers, but can also lead to criminal charges. One of the purposes of an audit is to identify fraud risk. This week, you will discuss with your colleagues what risk factors may have been present in this case, why the fraud occurFraud Risk Factorsred, and what happened as a result.

 

Read Case 1.3, “Just for FEET, Inc.,” in Contemporary Auditing.

What fraud risk factors are present in this case?
How would they affect audit planning?

With these thoughts in mind,

Answer the following questions:

Fraud Risk Factors

What areas of concern do you see in the financial statements?
What other areas of concern should the auditors have noted when they planned the audit?
How should the auditors have changed the audit plan?

Fraud Risk Factors
What motivations did the company have to commit financial statement fraud?
What were the consequences of the fraud? Apply the ethical framework in your response.

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