Approaches against Fraudulent Activities Case Study

Approaches against Fraudulent Activities - Case Study ExampleHence, even poorly performing firms obtained huge amounts of credits from MCI and this condition adversely touched MCIs operational efficiency. When receivable collection periods went beyond the stipulated timeframe, the organization was forced to write off some of its receivables. Undoubtedly, this condition ca utilise the firm to experience a recrudesce in its expenses and thereby a decline in earnings 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 score tricks to convince the management that the level of bad debts and amount receivables had fallen under the safety range. In different words, Pavlo totally manipulated the accounting system system to conceal the actual state of affairs of the company. It is obvious that the absence of a well-executed internal check system assisted Pavlo to apply unfair accounting tricks to deceive t he company management. A person is not allowed to carry through a transaction from beginning to end under the internal check system. ... touch aided him to employ accounting malpractices much(prenominal) as unapplied cash and placeholder credits to conceal MCIs actual financial status. Approaches against Fraudulent Activities If an individual suspects ambidextrous activity within the organization where he works, it is advisable for him not to make any false allegation. In addition, he must never try to ware any unfair advantage of that pasquinadeulent activity. Every organization has a distinct corporate culture and hence a specific mechanism to traverse fraud. It is recommendable for the individual to strictly adhere to the accepted fraud writinging mechanism of the organization. If an individual suspects fraud in his organization, firstly he must make an warm note of his concern. He should specifically try to note relevant details concerning the fraud including telephone c onversations, date and time, or names of parties involved. Secondly, the individual has to report the fraud to someone 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 supervise 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. Under no circumstance, the individual can disclose his suspicion to public or any other unauthorized person.