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Theft at the Register

Activities at the SW Products Inc are assumed not to be carried well but, not until the year 2004 when the Loss Prevention Department of the organization is contacted by the law enforcement officers regarding alleged economic crimes in organization. The illegal activities are said to involve a conspiracy by a customer to the organization and a branch manager at branch 12. They had struck a deal that is seen to be against the public good and the good of the organization. The police report that the customer tendered his offer for the products together with some money that was delivered in an unmarked envelope to the men’s room. In return, the customer gets deep discount for the products while the manager receives the cash. No doubt fraud is committed in this case. The first instance is the collusion of the manager with the customer on the deal which they all must be aware to be against the will of the organization. Therefore, the receipt of money by the manager and the subsequent allowance given to the customer of huge discount for the products constitutes fraud (Stuart, 2012).

The manager arranges to make a call to the store that would allow the customer to get the products is also an act to defraud the organization of its products illegally. Similar activities of fraud could have been taking place. This is informed from the fact that upon calculation of the loss caused due to the fraud, the inventory reports could not be reconciled. The management could not conclusively show how much merchandise was missing. In order for the management to have detected the scheme, the management must establish a strong audit department which would check whether the products sold or delivered matches the amount of money received for them. It is also evident as provided, that the control procedures were not followed. The management is said not to have taken any steps to ensure no such conspiracies are undertaken in the future. There is reluctance of management to effect changes that would help the organization. This raises doubts about the commitment of management to the cause of the organization and thus a likely scenario that involves many managers in such schemes to benefit themselves. Where they don’t reconcile, thorough investigation be carried out. This would help detect activities of fraud.

The internal measures to be put in place to counter any future fraud schemes would include the establishment of an independent audit department. This should work in order to ensure that the figures reconcile. The quantities delivered to the stores must match those released and the amount in sales made. This would check the activities of the managers who may be out to exploit the organization. Disciplinary measures that are tough should also be in place. In case one is guilty of such a crime, they should be sacked and face a jail term for the wrongs. This would deter and such wrong doers.

If I was a fraud examiner, I would reconcile the quantity delivered to the stores and compare against what is available in the store. The difference which should constitute the defrauded amount is the one that is not accounted for. That quantity multiplied by the selling price of each unit of the product would indicate the loss incurred by the organization.

The challenge of business fraud in the contemporary world is therefore a very real and practical affair that is causing the loss of millions of dollars across the world at every instance. The challenge is further coupled by the increased development of the Information Technology sector which sets the ground for the development of the efficient IT structures. The challenge of such fraud on the business world is much more realizable in the present order given the magnitude and the amount of funds normally lost in the process.

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