VEGAS Inc. Construction Company VEGAS Inc. is an innovative construction Company in England. It employs staff of 753 and was relatively successful until the end of Year 2016. Audit Risk and Going Concern In the beginning of the year 2017, this company started suffering from Economic issues along with Audit Risk alert on Going Concern in the current managements environment. Fraud Scandal In March 2017, an Internal Fraud discovered inside Vegas Inc. estimated of 11 Million, which put this entity under several Risks: Business Risk, operational Risk, Control Risk, Planned Detection Risk, Management Risk, Acceptable Audit Risk, Risk of material misstatement, Reputational Risk...etc. According to the KPMG Audit Report, the average occupational scheme goes on of 18 months before being detected. Unfortunately, it is most often the long time employees and Top performers abuse their positions of trust and exploit their access to multiple areas and systems of the company. Audit Evidences and Investigations After using multiple types of Audit Evidences during the investigations and Inspections, KPMG discovered that 17 staffs from VEGAS Inc. were suspected in a Fraud dealing Scandals, by transferring more than 7 Million to many fictitious Banking accounts related to third parties (families, friendsetc. ) providing false information to the Companys internal Control management. Collusion with Outsiders One of the more devastating internal Fraud schemes in VEGAS Inc., is that suspected employees colluded with external fraudsters which lead to hide the rest of stolen amount due to several outsiders participated in this those scandals during the past 18 months. At the end of the Report, KPMG believe that it may takes quite a few months of Investigations in order to reveal the full truth and to prevent more future financial losses and damages to an institution reputation associated with internal Fraud.

Questions:

1- List two Internal Control weaknesses stated in this case and explain the reason.