Assume that you are the fraud expert for a large Fortune 500 company. In a recent meeting with the executive committee, one of the officers explains that the fraud prevention program, which teaches managers and employees how to detect and report fraud, costs the company $150,000 a year. The officer then explains that it is a waste of time and money for the company to educate employees and managers about fraud. “Isn’t it the responsibility of the auditors to detect fraud?” he questions. As the fraud expert of the company, you are asked by the president to explain why managers and employees should be educated in the detection of fraud.
Prepare a detailed response to the following questions regarding the scenario above, incorporating information learned from the Fighting Fraud case study. Be sure to prepare in well-developed paragraphs (do not use a question-answer format).
Chapters 3 & 4 and Appendix 3-A: “Red Hat Code of Business Conduct and Ethics” in Fraud Examination
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