Data Collection. You will collect all the data and facts about this case. Do your initial...

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Data Collection. You will collect all the data and facts about this case. Do your initial draft/write-up.In Your report, you should, at the very least, address the following sections:Why this Case:which you would have done already last week.Description:describe the fraud very well including details on the accounting and financial statement effects, and journal entries if possibleRelation to Fraud Diamond:relate it to the fraud diamond, and be particular about the parties to the fraud and the role of professionals like the Management, auditors, the internal accountants of the organization, etc, and what role if any, that a fraud examiner could have playedImplications and Impact:discuss its implications and impact (direct and indirect, explicit and implicit), and outcomePrevention:discuss how such fraud could have been preventedSpeedy Detection:discuss how the fraud could have been detected sooner or quicklyInvestigation:explain how to investigate the fraudConcealment:explain how to fraud was concealed, how the concealment of the fraud was unraveled, how else it could have been unraveledConversion:explain how to unravel the conversion of the fraudFurther Recommendations:provide further recommendationsLessons:discuss other relevant lessons, issues or comments in connection with the fraud

Sandeep · Accepted Answer

5
DIAMOND FRAUD – DATA COLLECTION
Description:
	Weakness in Internal accounting Control - Net revenue for 2014 as previously reported of $593 million was overstated by $38 million and was restated to be $555 million. Income from continuing operations before income taxes for 2014 as previously reported of $59 million was overstated by $34 million and was restated to be $25 million.
 Faulty Revenue recognition policy - Failure to accrue for embedded retailer bill backs, under accrual for certain revenue deductions, and the incorrect recognition of $2.9 million in revenue for a portion of a transaction with one of its wholesale customer.
Misuse of Power to exercise control over the Company.
Relation to Fraud Diamond: 
	Dick, as CFO, and Hebeda, as Controller, had supervisory responsibilities and control over ensuring that internal accounting controls to provide assurance that transactions are recorded in conformity with GAAP.
Akorn failure to upgrade its Finance department’s size, scope and skills to keep up with significant changes to business and accounting processes and stubbornness to seek subject matter expert/consultant advice on improving ICFR also contributed.
From 2013 to 2015, Akorn’s management identified and publicly disclosed recurring material weaknesses in the company’s ICFR and emphasized need to enhance ICFR.
Audit Committee signed off on the general framework for the Remediation Plan.
Akorn’s Audit Committee, upon the recommendation of management, had concluded that the previously-issued financial statements should not be relied upon because of errors in the financial statements.
Role of Fraud Examiner:

Data Collection. You will collect all the data and facts about this case. Do your initial draft/write-up.In Your report, you should, at the very least, address the following sections: Why this Case :...

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