Cal Smith, Jr. is the night manager at a local doughnut shop that is doing very well. The shop sells donuts seven days a week, 24 hours a day. Cal runs the graveyard shift by himself because none of the other employees want to work at night. Since opening six months ago, Cal has not been able to find anyone to work for him and therefore has never missed one day of work. Cal makes his bank deposits every morning before going home.

Cal feels that he is overworked and underpaid and has made that known to management. The franchise owner, Kenny Jones has praised Cal for his hard work and dedication to the company. Kenny's only concern is that, once or twice a week, an entire batch of traditional glazed donuts has been thrown away because of overbaking. Despite these problems, Cal maintains a clean work environment and is considered a valuable employee.

Recently, Cal has yelled at people on shifts before and after his shift for seemingly insignificant reasons. He was hired as manager because he gets along with everyone and is usually easygoing. His recent irritability could stem from the fact that business is slowing down, and he does not have much interaction with anyone at night. He also has been complaining that he has not been getting very much sleep. One day recently, Cal came to work in a new BMW, the car of his dreams. Cal said that his dad helped him buy the car.

1. What areas of the business are most at risk for fraud, can you identify any symptoms of fraud that appear to exist at the doughnut shop and what steps could be taken to reduce opportunities for fraud?