$7-36$

FRAUD

ETHICS

LO $2,3,4$ Refer to the Focus on Fraud feature $$Lack of Oversight as a Control Weakness Leads to Embezzlement$$ and the Focus on Fraud feature $$The City of Dixon, Illinois, Sues Its Auditor for $$50$ Million Related to the Rita Crundwell Embezzlement.$$ The situation described in these features relates to the fraud committed by Rita Crundwell in the city of Dixon, Illinois. Crundwell was sentenced to nearly $20$ years in prison after pleading guilty to a wire fraud count. In September $2013,$ Dixon City auditors CliftonLarsonAllen and Sam Card agreed to settle for a total of $$40$ million. Refer to the documentary titled, "All the Queen's Horses" $(2017$ film$)$ for more information in regards to this fraud case. $($Complete answer neeeds to be between $500-1,000$ words long$)$

a$)$ Research this case and describe any recent developmentsin one to two paragraphs.

b$)$ Consider the framework in Chapter $1$ regarding ethical decision making. Comment on the parties at fault in this case and assess their relative level of fault in a few paragraphs.

c$)$ Explain where the internal control lapses were in this case and what controls should have been in place to have mitigated the chance of this fraud being able to have been committed. Answer this question in $2-3$ paragraphs.