I have another part of the project that I need assistance with if you re interested in answering part two. I have attached the prompt

In this milestone, you will draft a major portion of Section III of the final project in one coherent paper. In the paper, you will analyze the fraud tha t occurred in the case Crisis at the Mill: Cash Flow Forecasting Exercise. You will discuss the participants, evaluate the company?s internal controls and weaknesses, discuss any red flags, explain how the fraud was discovered, and examine the evidence gathered to support the proof of fraud. Additionally, you willexamine the company?s financial statements and nonfinancial information and discuss the outcome of the case.Specifically the following critical elements must be addressed:III. Analysis of Fraud That Occurred

A. Who were the main participants? Why did the fraud occur? Be sure to discuss this in terms of theoretical models of fraudulent behavior.

B. Evaluate the company?s internal controls for their effectiveness in preventing fraud. Where were the weaknesses?

C. What were the red flags that signaled fraud was occurring? How did you discern whether or not these occurrences were legitimate transactions?

D. Through an examination of the case study, explain how the fraud was discovered. How could the methods used in this discovery inform future investigations?E. Discuss evidence that was gathered to support proof of the fraud and to comply with the auditing standard for gathering sufficient competent evidence

.F. Examine the company?s financial statements. Perform ratio analysis and explain which results may indicate fraud.

G. Examine the company?s non-financial information, such as the management discussion and analysis (MD&A) section of the annual report.Identify the possible presence of fraud and provide rationale for your findings.

H. What was the outcome of the fraud case and what happened to the key players? How could this inform stakeholders in preventing future instances of fraud?

ACC 691 Milestone Two Guidelines and Rubric Overview: The final project for this course is the creation of a financial statement fraud case study. You will use a fraud case from a real-world situation. You are encouraged to put yourself in the place of the auditor as well as the stakeholders. You will consider the theoretical models of fraudulent behavior, evaluate internal controls, assess fraud risk factors, and apply prevention and detection techniques. You will also analyze the overall responsibilities of the auditors to organizational stakeholders while considering applicable auditing standards. Prompt: In this milestone, you will draft a major portion of Section III of the final project in one coherent paper. In the paper, you will analyze the fraud that occurred in the case Crisis at the Mill: Cash Flow Forecasting Exercise. You will discuss the participants, evaluate the company's internal controls and weaknesses, discuss any red flags, explain how the fraud was discovered, and examine the evidence gathered to support the proof of fraud. Additionally, you will examine the company's financial statements and nonfinancial information and discuss the outcome of the case. Specifically the following critical elements must be addressed: III. Analysis of Fraud That Occurred A. Who were the main participants? Why did the fraud occur? Be sure to discuss this in terms of theoretical models of fraudulent behavior. B. Evaluate the company's internal controls for their effectiveness in preventing fraud. Where were the weaknesses? C. What were the red flags that signaled fraud was occurring? How did you discern whether or not these occurrences were legitimate transactions? D. Through an examination of the case study, explain how the fraud was discovered. How could the methods used in this discovery inform future investigations? E. Discuss evidence that was gathered to support proof of the fraud and to comply with the auditing standard for gathering sufficient competent evidence. F. Examine the company's financial statements. Perform ratio analysis and explain which results may indicate fraud. G. Examine the company's nonfinancial information, such as the management discussion and analysis (MD&A) section of the annual report. Identify the possible presence of fraud and provide rationale for your findings. H. What was the outcome of the fraud case and what happened to the key players? How could this inform stakeholders in preventing future instances of fraud? Rubric Guidelines for Submission: This portion of the case study analysis should be 4-5 pages, double-spaced, with one-inch margins, 12-point Times New Roman font, and APA 6th edition formatting. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Analysis of Fraud That Occurred: Main Participants Proficient (100%) Determines who the main participants were and why the fraud occurred in terms of theoretical models of fraudulent behavior Analysis of Fraud That Occurred: Weaknesses Accurately identifies the weaknesses through an evaluation of the company's internal controls Accurately determines the red flags that signaled fraud was occurring and provides justification for how red flags were discerned to be legitimate transactions or not Analysis of Fraud That Occurred: Red Flags Analysis of Fraud That Occurred: Discovered Explains how the fraud was discovered and how the methods used in this discovery could inform future investigations Analysis of Fraud That Occurred: Competent Evidence Discusses evidence that was gathered to support proof of the fraud and to comply with the auditing standard for gathering sufficient competent evidence Analysis of Fraud That Occurred: Financial Statements Performs ratio analysis of financial statements and explains what information the ratio results provide through an examination of the company's financial statements Needs Improvement (75%) Determines who the main participants were and why the fraud occurred but not in terms of theoretical models of fraudulent behavior or determination contains inaccuracies Identifies the weaknesses through an evaluation of the company's internal controls but contains inaccuracies Determines the red flags that signaled fraud was occurring but determination contains inaccuracies or does not provide justification for how red flags were discerned to be legitimate transactions or not Explains how the fraud was discovered but does not explain how the methods used in this discovery could inform future investigations or explanation is cursory or contains inaccuracies Discusses evidence that was gathered to support proof of the fraud and to comply with the auditing standard for gathering sufficient competent evidence but discussion is cursory or contains inaccuracies Performs ratio analysis of financial statements but does not explain what information the ratio results provide or ratio analysis contains inaccuracies Not Evident (0%) Does not determine who the main participants were and why the fraud occurred Value 11.25 Does not identify the weaknesses of the company's internal controls 11.25 Does not determine the red flags that signaled fraud was occurring 11.25 Does not explain how the fraud was discovered 11.25 Does not discuss what evidence is needed to support proof of the fraud 11.25 Does not perform ratio analysis 11.25 Analysis of Fraud That Occurred: Nonfinancial Information Identifies the possible presence of fraud through an examination of the company's nonfinancial information and provides rationale for findings Analysis of Fraud That Occurred: Outcome Determines the outcome of the fraud case, what happened to the key players, and how this could inform stakeholders in preventing future instances of fraud Articulation of Response Submission has no major errors related to citations, grammar, spelling, syntax, or organization Identifies the possible presence of fraud through an examination of the company's nonfinancial information but identification contains inaccuracies or does not provide rationale for findings Determines the outcome of the fraud case and what happened to the key players but does not determine how this could inform stakeholders in preventing future instances of fraud or description is cursory or contains inaccuracies Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Does not identify the possible presence of fraud 11.25 Does not determine the outcome of the fraud case and what happened to the key players 11.25 Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 10 Total 100% \fThu Nguyen ACC 691- Milestone 1: Introduction and Analysis of Fraud Scheme Type SNHU SUMMER 2016 I. Introduction This subject company in this case study is WoolEx Mills. The top management team at the Mills had to act quickly to avert the accusations levied upon them so that they may venture deep into the United States market. In the process, they had to act in a way that shall present the company's financial statements; cash flows in a way that they do not depict any suspicious fraudulent activities. The type of fraud in this case study is known as manipulation of accounts which implies the act of presenting the accounts in the way they are not in actuality. II. Analysis of Fraud Scheme Type: The manipulation of accounts fraud scheme is generally executed by employees in top management positions and it usually involves making understatements or overstatements making it very hard to detect. The process followed as Troy Adkins, (2015) explains is very simple. The financial statements are either inflated to show a different figures in the earnings on the income statements making them better than they actually are or the earnings in the current periods are manipulated in such a way that the revenue is deflated or they inflate the current year's expenses. The second process involves making the financial statements look worse than they are in reality. Deloitte, (2009) explains a number of ways through which the accounts are manipulated whereby one of the ways is to manipulate the reported earnings directly. They further explained that inflating the value of inventory can include moving in such a way that they depict fictitious inflated quantities, or there's postponing or under-reporting of write-downs and reserves. The companies may also create fictitious inventory through the falsification of purchases and sales journals as is the case so as to decrease the costs of sales. As Adkins, (2015) analyzed, there are seven major ways in which companies manipulate the accounts which include; Recording of revenue in a premature manner; Recording fictitious revenue; Increasing income with one-time gains; shifting current expenses to an earlier or later period (which is very much evident in this case), not recording or improperly reducing debt; shifting current revenue to a later period which is also evident in this case; and shifting futureexpenses to the current period as a special charge. In this type of fraud, the internal controls break at the point where the management and the Independent audit team work together in the process of manipulating the accounts. Even though this type of fraud is not easily detected, in order to be successful the management team has to rely on the Independent audit team so that they may not disclose or find out this type of fraud easily. There is wide evidence that the very companies that audit such a company's financial statements are caught in a conflict of interest. For example, they may be paid highly than the contract prescribes so that they may give a positive opinion on those manipulated accounts. In case the auditors are unawares, then it's the lack of constant review of the financial statements which is compromised in this case. According to the fraud triangle, the risk factors that are evident in this case study in particular include the presence of the opportunity to do effect this type of fraud. When the two executives felt the urge to manipulate the accounts so as to venture into the new market successfully, they were very careful and thus had sought an opportunity that can never be easily discoverable despite the constant accusations laid upon them. It's actually very easy to manipulate the accounts in this place and several businesses in India have been found to do it commonly without being noticed. From the pressure of entering the new emerging markets and given the fact that the business is starting to grow, there is another major risk factor. The management feels that if they do not enter into this activity then they won't be successful the soonest. There is therefore a conflict of interest as they put their own urge for profitability first before the interests of the real owners of the company. The other risk factor which is also evident in this case is the fact that the management view that they aren't committing a crime but doing it for the wellness of the company at large and for themselves. They therefore are faced with a risk of lack of moral reasoning and integrity. According to Donelson et al., (2015), there are quite a number of substantive procedures that needs to be considered in assessing this type of fraud. In order to perform this effectively, the procedures involved include; checking the opening balances from the previous years; analyzing the ledger accounts postings; evaluating the subsidiary books into detail; counter-check the carry forwards and other castings; verify whether the accounts receivables and payable match those in the ledgers, find out whether all ledger accounts are used in the preparation of the financial statements, verify the total closing balance for each accounts; perform a horizontal and vertical analysis of the financial statements for the present and past two or three years; do calculations to find out the differences are correct and verify whether the amounts with rounded figures are correct; find out whether there are errors of transposition and other related errors of original entry exist such as entering 67 instead of 76; and find out whether all the vouchers have been used correctly. The professional responsibility of an audit is generally to provide an opinion on a company's financial statements and find out whether they give a true and fair view. In terms of fraud, the auditor has a responsibility of evaluating the material misstatement depicted in the company's financial statements that result into fraud. The auditor performs substance risk assessment and the internal control weaknesses. The impact that the auditor has on an organization are usually long-term effect as they best advice on the way forward and assist in disclosing the managers who are causing the company much losses without getting noticed. The type of evidence that is needed in this case is the documentary evidence. This is because manipulation of accounts involves the overstatement or understatement of records that have original copies. It's best to analyze the original copies in details and find out whether they are in liaison with the documents at hand. There must be somebody who authorized the fraudulent adjustments to be made and this is really helpful. Reference Deloitte, (2009) Simple listing of fraud schemes. India, Deloitte Touche Tohmatsu India Private Limited. Donelson, Dain, C., Mathew, Ege., & John McInnis, M. (2015) Internal control weaknesses and financial reporting fraud. Texas, U.S.A: University of Texas. Troy Adkins, (2015) Financial statement manipulation an ever-present problem investors. Retrieved from www.investopedia.com/articles/fundamental-analysis/financial-statementmanipulation.asp