AYB115 Governance, Fraud and Investigation

Damages are a monetary award that the law can impose for breach of duty or a tort (Tam, 2017) . It is imposed so that the plaintiff would still be in the same position if the original breach had not occurred. My friend, who undertook work experience for a forensic accounting, firm told me of a case he worked on involving an old JB Hi Fi. In this instance, JB Hi Fi had to close down a store because the council had built a bypass that blocked off and hid away the store. His role was to determine the resulting damages. Forensic accountants quantify this financial loss, work out a business valuation and calculate other damages resulting from an injury, to use in court proceedings. They deliver an expert unbiased business valuation report in court for disputes or civil action law suits (Giliberti, 2014) . Calculating the loss of profits is yet another measure of damages vital to the role of financial accountants  (Pfeiffenberger, 2016) . This loss is calculated if the business cont

Strict or vicarious liability is where an employee commits an act or omission in the scope of their employment and imposes the responsibility onto their employer (Neild, 2013) .  The employer will bear the costs and be found liable for the actions of their employee even without the proof of negligence. I can relate to this when I was meant to be looking after my seven year old sister when she drew with permanent marker all over her bedroom wall. Even though my sister was the one who damaged the wall, my parents found me responsible as she was under my care. However, in a corporate setting, vicarious liability allows companies to face agonizing legal battles even though the actions of the employee were not made aware or supported by senior management (Haberman, 2016) . On a regular basis vicarious liability claims against corporate or white collar crime such as fraud, bribery, insider trading and embezzlement, seems to be flashed all across our televisions. The focus is then put o

A 2016 KPMG Survey found fraud in businesses in Australia had reached a total of $363 million in the past two years and noted the majority of frauds were carried out by company insiders (KPMG, 2017) . As the incidents of fraud are increasing, forensic accountants are becoming very important in reducing loss and risk and ensuring the appropriate penalty is handed to the offender. I saw an example of this on the news regarding a Sydney woman, Lauren Reddie, who defrauded over $1.3 million from her employer, George Weston Foods, through numerous transactions spanning over two years. She was charged with 65 counts of fraud and 14 counts of money laundering. Forensic accountants follow the flow of funds to investigate fraud or embezzlement in companies, much like they did in Reddie’s case, and use this to lay a foundation for criminal or civil action  (KPMG, 2017) . Failure to relay well analysed data as an expert in a court proceeding will greatly effect the outcome of the case. It w

A sustainable information risk management system is vital to any business’ survival in battling off the growing number of potential threats associated with the dynamically changing IT environment  (Saluja & Idris, 2015) . It is important for all companies to implement a framework such as COBIT 5 or the ISO 31000* standard in order to effectively respond to risk scenarios. A system like such would have been useful to a former workplace of mine where a manager left his unlocked phone in the back of an UBER. His phone was stolen, and the perpetrator was able to access the companies own Facebook account. Without a password on his phone, the perpetrators were able to tarnish the business’ reputation and caused a lot of negative publicity. Cobit 5 highlights the firm’s processes, such as controls around strong passwords, as an enabler to achieve a sustainable risk appetite and overall end-to-end approach. It would be necessary for companies to implement a system which will sa