Approaches against Fraudulent Activities Case Study

Approaches against Fraudulent Activities - Case education ExampleHence, even poorly performing firms obtained huge amounts of credits from MCI and this modify adversely affected MCIs operational efficiency. When receivable collection periods went beyond the stipulated timeframe, the constitution was forced to write off some of its receivables. Undoubtedly, this condition caused the firm to experience a rise in its expenses and thereby a decline in internet per share. Ultimately, MCIs stock price dropped due to the decline in EPS. As Lyon and Tocco (n. d.) point out, Pavlo used a variety of accounting tricks to convince the management that the level of bad debts and amount receivables had fallen under the rubber range. In other words, Pavlo totally manipulated the accounting system to conceal the actual state of affairs of the company. It is manifest that the absence of a well-executed internal check system assisted Pavlo to apply unfair accounting tricks to snitch the company management. A person is not allowed to carry through a transaction from beginning to discontinue under the internal check system. ... situation aided him to employ accounting malpractices such as unapplied currency and placeholder credits to conceal MCIs actual financial status. Approaches against Fraudulent Activities If an individual suspects anticulent legal action within the organization where he works, it is advisable for him not to delineate any false allegation. In addition, he must never try to take any unfair advantage of that fraudulent activity. Every organization has a distinct corporate culture and hence a specific mechanism to report fraud. It is recommendable for the individual to strictly adhere to the accepted fraud reporting mechanism of the organization. If an individual suspects fraud in his organization, for the first time he must make an immediate note of his concern. He should specifically try to note pertinent details concerning the fraud including tel ephone conversations, date and time, or names of parties involved. Secondly, the individual has to report the fraud to person with proper authority and experience. Generally, it is better to report fraud to line managers, internal auditors, or whistleblowers. In addition, fraud may be reported to the Monitoring Officer, Chief Executive, or the Director of Finance. The individual should not make any delay in reporting the suspected fraud to proper authorities because such a situation would cause the organization to suffer further financial loss. Finally, the individual should ensure that the authority has taken proper actions over his fraud report otherwise, he must report the case to higher authorities. at a lower place no circumstance, the individual can disclose his suspicion to public or any other unlicenced person.