Question
Patrick works for McGills Computer Repair, owned and operated by Frank McGill. As a computer technician, Patrick has grown accustomed to friends and family members
Patrick works for McGills Computer Repair, owned and operated by Frank McGill. As a computer technician, Patrick has grown accustomed to friends and family members asking for assistance with their personal computers. In an effort to increase his income, Patrick started a personal computer repair business that he operates out of his home on a part-time basis, working evenings and weekends. Because Patrick is doing this on the side for friends and family, he does not want to charge as much as McGills charges its customers. When Frank McGill assigned Patrick the task of developing the budget for his department, Patrick increased the amount budgeted for computer parts. When the budget was approved, Patrick purchased as many parts as the budget allowed, even when they were not needed. He then took the extra parts home to use in his personal business in an effort to keep his costs down and profits up. So far, no one at McGills has asked about the parts expense because Patrick has not allowed the actual amount spent to exceed the budgeted amount.
1. Why would Patricks actions be considered fraudulent?
2. What can a company do to protect against this kind of business risk?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started