Tallahassee Bean Counters Case Study Analysis
The party responsible for monitoring the routine functioning of the office hasfallen victim of fraudulent activities or practices.TBChas suffered from severe financial loss because of the fraud done by Ben Bill, thereforeTBCshould contemplate todefy the party involved in such misleading activities, Ben Bill. It is recommended that TBCshould file a lawsuit on the Ben on all of the revenues loss incurred because of Ben as well as for the falsification of the payrolls and unethical collection of salaries by him.
One of the largest expenses in any corporation is the payroll, due to which an internal payroll policy shouldestablish internal check and control in order to protect and control the expenses. It would minimize the likelihood of fraud and the incidence of errors. The payroll procedures should be put in place in order to create efficiencies in terms of document processing, time collection, payment & record keeping as well as data entry. Also, embedding advances and automation in the system technology would result in cost-effective payroll procedures. Developing a transparent wage structure would explain the types of wages the employee might collect. TBCshould have a trustworthy manager or payroll specialist who would generate accurate payroll. Only the payroll specialist should have an access to the payroll processes and records. Inspecting the payroll records is critical to assure that everything is accurate. TBCshould also have someone who should be entitled to audit the record on a periodic basis. Also, TBCshould lock up the records of payroll so unauthorized people can’t have an access to them. The electronic data should be secured with a strong password. General IT control should be in place to define access to data, application and system. In addition, the auditor should conduct an audit of ghost employees. TBCshould have someone recruited who would be liable to compare the payroll records regularly to employees’ personnel file and time card reports to monitor the discrepancies, such as: duplicate bank account, duplicate addresses, duplicate social security number and fake employees.
In addition to this, TBC should perform a risk assessment and it should perform its operations under complete security.The risk statement would help in measuring the probabilities and chances of occurrence of anyfraudulent event. It is recommended to TBCthat it should implementedan anti-fraud internal control, which might reduce the chances of anyfraudulent activity. The management of TBCshould have a closer look over the transactions made, and try to reduce the risk as well. TBCshould conduct internal as well as external control,which might provide some important information regarding misleading quotations in financials of TBC. Itshould extensively follow the Generally Accepted Accounting Principles when reporting financials, which would be beneficial in reducing the risk of default or fraud. Most importantly; TBCshould have an internal auditor who should provide an insight into the procedures, policies, and the culture of the organization and provide an aid to the management by substantiating internal controls, such as risk mitigation controls and operational effectiveness. The internal auditor shouldalso conduct audits of the employees’ salaries on a periodic basis. The internal auditor should minimize the risk of failure and value TBCby performing consulting and assurance activities.The internal auditorshould assess the mitigation processes and monitor the risk, detect frauds, offer objective assurance, add value and improve the operations of TBC. Also, the internal auditor should monitor and track the system and process that would likely keep TBCon track, and he should offer advices and consultationsfor continually improving procedures and system. For an internal auditor, the scope is broad within the organization and can include any of the following areas:
- Risk management activities.
- Controls that the management of the organization have in place.
- Effectiveness and efficiency of the operations.
- Management and financial reporting reliability.
- Compliance with local regulations.
- Proactive assessment of frauds.........
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