Dental Care for the City (DCC) is a not-for-profit organization founded and managed by Denis, president of the organization. The Montreal-based organization runs a free dental clinic for those who cannot afford proper dental care. Denis is a professor in an accredited dental college in the city. Under his management, DCC has forged partnerships with several dental schools in the province. Professors and students from the partner institutions volunteer at the free clinics. DCC provides the facilities and pays for the necessary overhead through a combination of government funding and private support. In the recently closed financial year ending April 2022, DCC reported net revenue of $1.2M. The clinic also has a boutique in the facility that sells tooth brushes, floss, and other dental care products at cost. In addition, DCC organizes workshops that run every third Wednesday of the month on selected topics of interest to dental health professionals. The workshops feature prominent guest speakers and are very popular. DCC charges each participant a registration fee of $33. The workshops, with a capacity of 200, are usually full. Denis has left the day-to-day operations of DCC to his clinic administrator, Elaine, with almost no supervision. Elaine manages the clinic, the workshop program, and the boutique. This arrangement seemed to be working very well, and Denis was very satisfied to be relieved of overseeing the operation. However, in the past two years, Denis realized that in spite of a surge in donation and government funding, the clinic has barely managed to break even, without increasing the level of services. When this financial year was coming to an end, Denis decided to investigate the matter further. Since DCC does not have staff with adequate training to perform the review, and funding is rather limited, Denis has asked you, his friend and a Certified Internal Auditor, to do some pro bono work. Seeing this as a worthy endeavor, you gladly accepted the assignment. You set up an interview with Denis and Elaine, during which you made the following findings: DCC allows pa DCC allows payment in cash, by cheque, or by credit card. Elaine handles all collections for the workshops. She is responsible to deposit the cash and the cheques, and record the transactions in the system. Most of the payments in the boutique are in cash, as the transaction amounts are typically small. Payments are handled by a store clerk under the supervision of Elaine, who retrieves the cash from the cashier at the end of each day, deposits it, and records the transaction in the system. The boutique keeps a $1,000 float. Credit card payments are processed using a machine terminal. The machine allows refunds to be made to any credit card for an amount entered by the employee in charge of the process. Only Elaine has the access code to the machine. . DCC is dedicated to have state-of-the-art equipment in good working condition to service the public. This also provides an excellent venue for students to practise their trade, which makes it attractive for dental schools to partner with the organization. Elaine explained that she normally took note of the opinion of the practitioners regarding equipment needs, and would also regularly inspect the equipment herself and decide on what to dispose. To improve the economy of the equipment renewal process, she would sell the old equipment through an internet auction site. The proceeds were deposited in her personal bank account, and subsequently transferred to DCC by the deposit of a personal cheque she would issue. She explained that it is done this way because DCC has no way to properly record a direct transfer of funds from the auction site. When you asked for an inventory list of all the equipment in the clinic, Elaine replied that she does not keep a log to track the purchase or sale of equipment, nor does she have a list of the existing equipment. There is also no formal process to request for the renewal or disposal of equipment. . In March, there was a flood in the boutique caused by a leak of the water pipes in the ceiling. Nearly all of the merchandise was ruined. The damage was fixed by the end of March, and the inventory was replenished in April. After the interview, you decided to perform an inventory count for the boutique. You determined that the total value of the inventory was $2,000. Required: Prepare a memorandum to Denis that explains the three dimensions of fraud, and his responsibilities related to the deterrence of fraud. You should explain what actions should be implemented to deter fraudulent behaviour. Identify potential indicators of fraud at DCC. (20 marks)