Question

• research an example of fraud by inventory misstatement for a public company in the last five (5) years. Next, explain this incident, including the particulars of how the fraud was achieved and how it was detected.
• Research clearly shows that whistleblowers are the best detection method. Explain the role whistleblowers played in the fraud example you selected previously, or how a whistleblower would have enhanced the detection of that fraud example. Provide support for your response.

Answer 1

Fannie Mae has been charged with 400 million dollars to fraud there investors by manipulating the accounts resulting capture of million dollars in form of the undeserved bonuses.
It has been a very big scandal involving huge amount of money such as $11 billion. SEC put on penalty of 400 million dollars against Fannie Mae in specific settlement over the very well known accounting manipulation.

For better detection of the specific fraud I would have done an intensive approach of the top down structure of the company. While having assessment of the different structural analysis as well as having electronic data management system which can be analysed plea for observing any kind of destructions into the company would have been my choice for early detection of the specific scandal. By having multiple financial analysis and also having a specific team to analyse the situation as well as having a find eye on the investment from the company would also have been my main motive to create more ethical working environment without any standard.
By implementing new accounting methods and implementing the new risk management strategies would also have been my main concern. Be specific technological advancements as well as implementation of newer strategies into the organisation would have directly helped me too early detect this is specific scandal and to overcome the situation.
While having intense Research and analysis over the financial structure of the company, I would have directly increase the level of implementation of risk management strategies as well as analysis strategies which would have been reduced or stopped the specific situation.