Using the business process mafunty model, what is the current matunty ievel of the HK department at Mans Automotive? A10. (1.03-5) Fraud The Chester family owned and operated CEL, a matalacturer of electrical equipment. Mom and Dad Chester started the business. Their children grew up, became stockholders, and sat on the board of directors, which consiated entirely of family members. The youngest son, Mathew, was in charge of human resources and payroll. He hired employees, authorized factory time aheets, calculated the net pay for each emplo, and took custody of the payroll checks from the outside firm that generated the physical parchecks for employees. Many of the factory workers were lowincome immigranti who did not trust direct deposins for their paychecks, Matthew distribated paychecks to these employees himself. Matthew/s sister, Maisie, was the CFD of the company and a member of the Doand of Directorz By ancldent one day, she detected a payroll fraud perpetrated by her brothec When reviewing the fronts and back of canceled payroll checks, she noticed endorsements to her brother on the backa of some payroll checka. Further shecking revealed many more of instances of endorsements. As a CPA herself, she became frightesed because she know the implications of fraud- She hired a CPA firm to do an audit and to uncover the extent of the fraud. A thost, or fictitious, employee is someone who is on the paroll bat who did not do work to earn the pay. When a ghost employee is paid, the mosey endis up in the handr of not remove terminated employees from the main table. In this mannet, he creaned 344 ghost employees over time. Me enberzled over $508,000 from the familly business by creating more than 600 checks made out to ghost employes over a period of 35 ywars. He specitically tarieted low income immigrant workers who needed work and could not speak English well to be his ghout employees. Maise reported the froud to the board of directors, Upon seeing the audit evidence, Matthew confessed to the fraud and apologised profusely. Matthew had volated the truit opportanily to commis payroll fraud, and he tookin. Att the family members on the board of directors, except for Maisle, accepsed Matthew/s apologs, circled the family wagoh, asd tried to swerep the frasad under the rug. Maisie hownef, was scared She realized that, while fambly owned, the compary was a separate legal entity and that the fraud resalted in silenificant risks for the company There frasd wat not addresed, and the company/s reputates in the community could suffer harmi the uss to the housint asthority was frandulently owrstated. He embezzled over $508,000 from the family business by creating more than 600 checks made out to ghost employes over a perfod of 8.5 yeark. He sp low income imitigrant workers who needed work and could not speak. English well to be his ghost employees: Maisle reported the fraud to the board of directors. Upon seeing the audit evidence. Matthew confessed to the fraud and apologized profuscl. Matthew had viofated ast placed in him by his family. His motivation was greed. Even though be was a shareholder in the business and earned a good salary it was not enough for him. He san the opportunity to commit payroil fraud, and he took it. All the family members on the board of directors, exceps for Maisie, accepted Matthew's apology, circled the family wagon, and tried to sweep the fravd under the rug Malsie were criminal implications for all involved, such as identity theft. The employes used as "ghosts" could sue the company, the business inrurance could be canceled if the fraud was not addressed, and the company's reputation int the community could suffer harm. Tisis crested tax problerss for the actual employees used as ghost employees. One employee, for example, was denied lowincome housting because his "Income" reported by the ins to the housing authority was fraudulently overstated. Following the advice of the soditors, Maisle reported the fraiad to the police. Matthew recelied a sentence of 23 months in prison and was ordered to pay back 5506,000 as they are required to declare and pay tass on their dif gotten gains? The frasd casised a huge rif in the family. Malie, the whistieblower became the family outcast. Bequired 25 ugent improvements in the process at cEI to redace the risk of pxyments to fictaious employees