After graduating from college with your MBA you decide to ta

After graduating from college with your MBA, you decide to take your grandma’s secret cinnamon roll recipe and open up a bakery. You grew up devouring your grandma’s rolls, and you have convinced her to give you the secret. You are confident that your bakery will be the next big hit in the fast-food business.

You take out a business loan for the maximum amount your bank will give you, hire several employees, and open a beautiful store that is designed to look like your grandma’s home. After eight months of hard work and diligence, you are crushed when you realize that your store manager has been stealing from you. One of your recent hires tells you that during her last shift, the manager, Stephanie, voided a sale of two-dozen cinnamon rolls, stamped the receipt as a return, and pocketed the money. Stephanie warned the new hire not to say anything and told her she deserved the money because she didn’t get paid enough. Encouraged by your open- door policy, the employee confides in you.

1. Identify what symptoms this fraud will generate. In addition, identify how this fraud will directly affect your revenue and inventory accounts.

2. Explain the steps you should take to search for each symptom you identified in part (1). In particular, describe the computer queries and transactions that should be searched to find this fraud.

3. After you have identified several symptoms, do you have enough evidence to prove that she is guilty? What other evidence is required or useful in this case?

4. Besides searching for symptoms of the fraud, what other investigative steps can be taken to elicit a confession or otherwise prove the fraud?

5. What steps could have been taken to prevent this fraud from occurring in the first place?

Solution

1-These kind of frauds are very harmful for any organisation and directly decreases the overall efficiency as well as productivity of the specific Organisation in terms of the business revenues as well as different aspects of Management. This fraud would generate constant drop in revenues. Create uneven receipts. Overwritten transactions on the computer system as well as deletion of multiple orders.
It will definitely decrease the overall revenues and empty the inventory accounts faster than usual. As most of the orders are treated as return and the final product is a dish which cannot be reversed, overall inventory but the wasted and the profits for the restaurant definitely go down.
2- after noticing these changes in revenues as well as organisational structure I will be searching for the record generated by the bakery and for proper further investigation I will go through the CCTV footage. This special instruction would help me to determine fairness of the work done by the manager.
Billing system as well as frequent account bills of every employee inside the bakery can be searched on the computers. Total number of items in inventory and cross questioning the employees as well as installing revenue analysis softwares in the system can be done for a better track of record and for keeping an eye on the fraudulent transactions.

3- after analysing the specific situation and having an eye on the symptoms, my solution would be able to gain enough evidence to prove her guilty. CCTV footage would provide better support to the overall evidence and would definitely confirm the activities of the manager towards the Bakery.
Computer system record as well as unevenness of the bill is also very important in this is specific case.

4- proper analysis of the system as well as observation can be done to elicit a confession or to prove a specific fraud. Observation and proper maintenance of the system would definitely allow the owner to specify and to retain fraud from the Bakery.

5- supervising is one of the main step for stopping this kind of fraud occurring in the organisations. By installing cctv cameras inside your bakery, overall observation level as well as level of fairness can be definitely increased in the employees. CCTV would definitely create a fear of getting caught which one prevent this kind of frauds to occur in the bakeries.