(a) Firdaus Lou had recently been promoted to construction manager at a development firm. He was responsible for dealing with contractors who were bidding on a multimillion-dollar excavation job for a new high-rise. Times were tough. Several contractors had gone under recently, and the ones left standing were viciously competitive. Each contractor was responsible for submitting financial statements of his or her company along with the bid. Firdaus knew that the development firm was carefully reviewing each company to ensure that it had the necessary cash flow to complete the project. The last contractor it had hired declared bankruptcy before the project was completed. That morning, four bids were sitting on Firdaus's desk. The deadline was midnight, and the bids would be opened the next morning. The first bidder, Bu Fly, was a tough but personable character that Firdaus had known for years. Firdaus had lunch with him today and Bu Fly hinted that he had "inadvertently" left some cash payments of operating expenses out of his statement of cash flows so that his cash flows from operating activities would look better. Bu Fly told Firdaus that he was waiting on several clients to pay him for past jobs but that he knew he would be receiving the money shortly. After lunch, Firdaus thought carefully about what Bu Fly had said and decided not to mention anything to his company. He knew that Bu's firm was a reputable company and would be around a long time. Required: Discuss the effect of the fraudulent action by Bu Fly to Firdaus's company and explain the ways that a business can protect the fraud