Uy IS Ie tee Traud prevent measures" that are applicable to Cendant. Simulation Question 3-2 is simulation question is based upon a true set of facts. The information contained in the simulation question was obtained from publicly available sources. How to Prevent Future Fraud in Anasazi? In 2005, the external auditor of Anasazi Corp ration discovered three major frauds. The first was a S4 million theft of inventory that h six years. The second was a $3 million kickback scheme involving the most senio been allowing certain customers to overcharge for products in return for personal overstatement of receivables and inventories by a subsidi would have fallen r purchasing staff. This senior purchasing staff had yments and other financial favors. The third was an hout the overstatement, his unit's profit be determined. All three of these frauds were reported in the ary manager to enhanced reported earnings. With far short of budget. The amount of overstatement has yet to cial newspapers and have been embarrassing to the company financ occurrences." In their words, they are "sick and tired of significant hits to the bottom line and negative exposure in the press. Assume the In response to these incidents, Anasazi's Board of Directors demanded that management take "positive steps to eliminate future fraud management hired you, an accounting fraud examiner, to develop a comprehensive program to prevent future fraud in Anasazi Required In developing your comprehensive fraud prevention program, describe clearly the roles the following Anasazi's personnel will play in the program. Refer to the various recommendations and guidelines on fraud prevention discussed in Chapter 3 and use the format below, An entry is made in the first row as an example to help you complete the rest. Anasazi's Personnel Role in Preventing Future Fraud 1. No gift, loan or favor will be made to or accepted by employees or their immediate families involving any supplier, customer, or others with whom Anasazi does business if it is intended to influence a business 1. Employee decision. This will not prohibit casual entertainment, business entertainment consistent with Anasazi's usual practices, or gifts that are reasonably viewed under the circumstances in which they are given or received to be of nominal value. 2. 2. Management 3 Fraud Prevention: An Overview 3. Audit Committee 2. 4. External Audito 2. 5. Internal Auditor 6. Company Lawyer 2. 3. Note: Your answer must include at least I role for each of the above 6 persoanel