Prompt: Analyze the fraud that occurred in the case Crisis at the Mill: Weaving an Indian Turnaround. You will discuss the participants, evaluate the company’s internal controls and weaknesses, discuss any red flags, explain how the fraud was discovered, and examine the evidence gathered to support the proof of fraud. Additionally, you will examine the company’s financial statements and non-financial information and discuss the outcome of the case.

Specifically, the following critical elements must be addressed:

• Analysis of Fraud That Occurred
  • Who were the main participants? Why did the fraud occur? Be sure to discuss this in terms of theoretical models of fraudulent behavior.
  • Evaluate the company’s internal controls for their effectiveness in preventing fraud. Where were the weaknesses?
  • What were the red flags that signaled fraud was occurring? How did you discern whether or not these occurrences were legitimate transactions?
  • Through an examination of the case study, explain how the fraud was discovered. How could the methods used in this discovery inform future investigations?
  • Discuss evidence that was gathered to support proof of the fraud and to comply with the auditing standard for gathering sufficient competent evidence.
  • Examine the company’s financial statements. Perform ratio analysis and explain which results may indicate fraud.
  • Examine the company’s non-financial information, such as the management discussion and analysis (MD&A) section of the annual report. Identify the possible presence of fraud and provide rationale for your findings.
  • What was the outcome of the fraud case and what happened to the key players? How could this inform stakeholders in preventing future instances of fraud?