Forensic Investment - 1144 Words

Situation analysis Important internal controls that were ignored? The auditors of Enron did fail in their task of providing a duty of care to all of the parties. The main reason for this is that they failed to correctly audit the assets and financial position of Enron resulting in all stakeholders having no clue about the forthcoming collapse of Enron. This resulted in the stakeholders facing a very critical condition or a phase where in they were not sure if they would be able to recover their investments and debts or not. The auditing process has revealed several issues and findings of problems within the accounting system and the same have been discussed as the primary areas of exposure, areas of possible mishandling of accounts†¦show more content†¦Pacts, specifically in the financial department were done rapidly without scrutinizing whether they were harmony with organizations risk management rule or goals. 3. Opportunity is one factor that can explain why falsifying of financial statement is occurring frequently it is common through weakness in the internal controls which includes insufficient supervision and review by board of directors of some organization, separation of duties, oversight and management approvals that are not consistent with the organization goals as well as system controls. Pressure also is another factor which relates from non realistic time frames and performance targets arising from conspiracies between employees and third parties. 4. When there is lack of clarity or any unclear financial report that is most of the times inconsistent like in the case of Enron, this is a clear indication of a red flag some one especially auditors under strict supervision should consider taking action. Investigations and analysis in fraud cases consistently show that red flags were actually present and that there were in many instances recognized or upon recognition they were never acted upon. When red flags are discovered suitable action should be swift though, mistakes are most times errors typesShow MoreRelatedForensic Accountants Essay1744 Words   |  7 PagesForensic Accountants Helene M. Snyder Dr. Ann Pohir-Vieth Contemporary Business 508 August 8, 2012 Determine the most Important Five Skills that a Forensic Accountant Needs to Possess and Evaluate the Need for each Skill Students interested in the Forensic Accountant profession are required to possess many skills because this is the hottest career in accounting. People who work in this career investigate white collar crimes such as business fraud, incorrect financial reporting, and illegalRead MoreA Report On Healthsouth Used Bad Debt Reserves Essay1366 Words   |  6 Pagesthe audit. 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This way they don’t lie about their stock value. Forensic accountants are in charge of checking business financial records to make sure that they are true. When companies falsify their records it makes the company look better, which makes people want to buy shares of their stock. When more shares of stock are bought that will be putting more money into the company. Forensic accounting has been in an increaseRead MoreA Report On The Marketing Strategy1775 Words   |  8 Pagesthe allocation of capital between lines of business and A-Z will have a small growing account which will generate a poor short-term return on investment which will be supported by management as the future will improve. If the account grows and it still has poor returns, the Board will demand immediate action and request they reduce COR. The capital investment in the increased premium income will become unsupportable, and if the return to profit is not anticipated in a reasonable timeframe, they mayRead MoreMerck : The Largest Pharmaceutical Organization1879 Words   |  8 PagesGermany. During the year 1945, the company was incorporated as a full American company through the tutelage of the United States government. Its market coverage is broad in the area of offering pharmaceutical services. It is attributed to the high investment on research and development along with competent human resource on board. Technical expertise in Merck is at a higher notch due to the effective and efficient working methods. This company boasts of its outstanding prowess in winning rare awards