Question

Unit 4 - Fernando's Fraud Triangle 48 48 unread replies. 48 48 replies. Fernando’s Fraud Triangle is a retail establishment that has been experiencing lower revenues in the last six months, even though sales are up to 21.1 %. Fernando’s sells whatever products you want to sell and takes cash, credit cards, and checks. All three categories-cash/checks/credit cards-have remained consistent with no significant increase-while sales are up. There are three employees and all have access to the register and can override refunds and any other items that need to be charged back. I have narrowed it down to three employees for you. You have been called in as the Fraud Examiner to see who has their fingers in the till. Mitch: 47 Years old; 14.2 years with the company/full time employee Recently divorced/ pays child support for two kids Wages are garnished by the courts for payment Drives a three year old Jag-u-Ar Just bought a new home Makes $88,282 a year Loves to dress in style Loves the night life Crystal: 31 Years old; 10.8 years with the company/full time employee Married/mother of two children Husband has a full time job Makes $72,262 a year Drives a four year old Volvo Recently bought a new home Loves to dress in style Loves the night life John: 21 years old; 5.3 years with the company/part time employee College student/accounting Just bought a four year old Hyundai Santa Fe Lives with his parents Pays for school Makes $38,282 a year, part time Single Loves to party and dress nice

Answer 1

Lets first understand the lifestyle of all the 3 employees before we arrive at a conclusion.

Mitch: 14 years as full time in the company, brought a house, wage is garnished (has debt), divorced and pays for 2 kids

Crystal: approx. 11 years as full time in the company, married with two kids and husband earning good.

John: student, part time job and lives with family.

There are 3 key reason/criteria to do fraud:

Financial problem, Greed and Opportunity to do a fraud.

John: not a fraudster as he is still a student who is working as a part time. No financial obligation as he is staying with parents. Moreover as he is a part time, he does not have the knowledge of the financial transaction of the company hence even he has the greed he does not have the opportunity to do so.

Crystal: She does not have any financial obligation. Happily married with husband earning good. Able to fulfill her wishes so she does not have the greed. Even though she has the opportunity to do a fraud as she is quite old in the company her inner conscious will not allow her to do so. As most people fear the law not because they will be subject to charges but the fear of loosing the loved ones and the status in the society. She would not take a risk to disrupt the happy life she is leading.

Mitch: Likely the fraudster. He has all the 3 criteria to make the fraud. Financial problem with recent divorce leads to an irrational thinking along with the opportunity to do the fraud as he is old in the company. Often burdened with financial problem and mental trauma leads one to choose a easy route to escape from the troubles.

My take would be Mitch to be the fraudster.