CRJ 555 University of Colorado Fraud Risk Case Study

determine the fraud risk, examine the importance of creating a comprehensive approach to combating fraud, and recommend changes to eliminate opportunities for fraud for a business.

Read the Case Study Fact Sheet attached. Evaluate the situation, then answer the following questions:

1. What concerns are raised about why the perpetrator committed the fraud against the business?
2. Identify the possible internal control failures that would have increased the risk of fraud.
3. Using the Fraud Triangle and Fraud Scale, evaluate why the perpetrator would have/could have committed the fraud.
4. Referring to the Fraud Prevention Chart in Albrecht et al (2018), page 117, did the business owner implement a comprehensive approach to fighting fraud? Why or why not? Give examples.
5. Did the business owner create a culture of honesty, openness, and assistance or eliminate fraud opportunities? Why or why not? Give examples.
6. What could the business have done differently to detect this fraud earlier or prevent it from happening?
7. Recommend changes that will eliminate opportunities for fraud in the business.

For this Critical Thinking Assignment, adhere to the following standards:

• The paper should be approximately 4-5 pages in length, not counting the title or references pages, which must be included.
• The paper should follow an organized format that includes an introduction, a body discussing the topics in fully developed paragraphs and then end with a conclusion summarizing the points in the paper
• CASE STUDY
• Critical Thinking Assignment Case Study Fact Sheet

  Jesse Grant worked asthe assistant manager of The Moonlight Cafe in Fort Collins, Colorado.
  The restaurant has ageneral manager and 12 part-time employees.
  Grant has worked at theCafé for more than 18 years but has been the assistant manager for more
  than eight years. Granthas three children. The oldest daughter is a high school senior who wants
  to attend an ivy leagueuniversity. Her child has the grades but has not secured scholarships or
  loans to cover thecosts. To make matters worse, Grant’shusband lost his job due to the
  company movingoperations overseas. Also, her youngest daughter has chronic health problems
  and the loss of herhusband’s health insurance has created an unexpected financial burden on the
  family.
  The Café owner placed totaltrust in Grant. She had full access to the restaurant at any time of
  day. She was also givensole responsibility for restaurant operations, with no oversight, to
  include:
  • Preparing the cash for the register daily
  • Counting cash receipts at closing then preparing daily cashreports
  • Approving error corrections and adjusting entries
  • Making the account deposits,
  • Receiving the bank statements and reconciling the bank accountsand deposits
  • Handling employee time cards

  The Moonlight Café ownerreceived a notice from the bank that a check that restaurant supplier
  had deposited wasreturned for insufficient funds. When the owner contacted the accountant, it
  was found that the fundsin the operating account were greatly reduced and the restaurant was
  operating at a loss fornearly a year. The daily cash deposits appeared to be smaller than
  expected.

  Grant was questionedabout the dwindling deposits. She justified the reduced cash receipts by
  blaming a reduction incustomers due to an extended road construction project in front of the
  business. This excusewas questionable because most of the customers came from within
  walking distance of therestaurant. Grant was removed as the assistant manager and assigned to
  the serving staff withno responsibility for restaurant operations. The demotion prompted Grant
  to resign from therestaurant.

  After Grant’s resignation,the Café owner decided to pursue legal charges against Grant
  contacted the localpolice department to investigate possible fraud and embezzlement, something
  that was not donebefore. The police found that Grant was making over 100 deposits of nearly
  $10,000 each in herpersonal bank account. The officers could not find any other evidence of
  Grant living above hermeans. When questioned by the detectives, Grant justified the deposits as
  proceeds from herwinnings as a professional gambler.
  Police also questioned Café employees about their possibleinvolvement and knowledge of the
  fraud. Several employeessaid they suspected that Grant may be engaged in suspicious behavior
  but were hesitant toreport Grant. Some long-time employees recall that another manager who
  was suspected of fraudwas reported to the owner. The manager was terminated but not
  investigated. However,the employee who reported the manager was terminated for reasons
  unknown to the otheremployees. Ohers were hesitant because they feared the Café owner
  because he had a lowtolerance for employee complaints and discord.