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How Fraud Is Committed By The Board Of Directors And Cynthia Cooper

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Hypothesis Development

Investigation Planning

Fraud Investigation Process

The process for investigating potential fraud includes: the initial case analysis, planning and preparation, fact finding, analyzing and reporting the evidence, and following-up. Before starting the WorldCom investigation, I need to know what the alleged crime is, who the perpetrators are, and if an investigation is necessary. Cynthia Cooper believes that fraud is being committed by more than one perpetrator, so an investigation is needed. Since the SEC is involved, I am seeking assistance from outside counsel. After completing the initial analysis, I need to plan my investigation. Since a majority of the decision-makers are being investigated, I am going to keep matters with the Board of Directors and Cynthia Cooper through weekly meetings. During my first meeting with Cynthia Cooper, I will develop an investigation plan that enables me to assess …show more content…

Internal controls also act as a catalyst against fraud risks when applied properly. The types of internal controls are: separation of duties, access controls, physical audits, documentation, trial balances, reconciliations, and approval authority. However, WorldCom’s lack of internal controls is less than to be desired. I need to complete a fraud risk assessment to assess possible exploitations. Therefore, I need to identify the inherent fraud risk, assess the likelihood and significance of the inherent fraud risk, and respond to the reasonably, likely, and significant inherent fraud risks. A risk assessment team will be assembled to identify the inherent risks. For example, documentation enables WorldCom to maintain proper recordkeeping. However, there are transactions not supported by source documents (Managing the Business Risk of Fraud: A Practical Guide 2008) (Ingram

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