Cost: Internal Control and Greater Providence Essay

Submitted By Jncarroll2004
Words: 1012
Pages: 5
Open Document
Greater Providence Deposit & Trust

Control procedures over the disbursement of loan funds to minimize the risk of this type of fraud. During the investigation which led to James Guisti and the manager of a North Providence branch office and a 14-year employee who once worked as one of the bank’s internal auditors which lead to the $1.83 million embezzlement charge of James Guisti over a three year period (Romney and Steinbart, 2010 p244). Greater Providence Deposit & Trust might improve its control procedures over the disbursement of loan funds to minimize the risk by developing policies. This starts with a good of sound internal environment, commitment to integrity and organizational structure will be a good start. Commitment to integrity is important to an organizational culture which is a set of principles and standards to help leaders organization better prepare themselves for the ethical dimensions of company’s activities and to help ensure that their standards of professionalism are reflected at every stage of business planning and development (Romney and Steinbart, 2010 p209). It should includes polices for conflict of interest. An organizational structure defines line of authority, responsibility, and reporting. It provides the framework for an organizational when it comes to monitoring operations. A clear segregation of duties is clearing needed; segregation of duties is critical to effective internal control because it reduces the risk of mistakes and inappropriate actions. It helps fight fraud by discouraging collusion. An example of this is the person who originates the loan should not be the person who approves the loan, no matter the amount of the loan. This was the mistake that Greater Providence Deposit & Trust made by allowing James to approve his owe loans because they were a small amount.
Improve its loan review procedures at bank headquarters to minimize its fraud risk There were 67 loans taken out by Guisti in different names and some of these people were family members and one was from someone who did not exist (Romney and Steinbart, 2010 p244). These processes clearly have some flaws, in the reviewing process of loan applications. Greater Providence might improve its loan review procedures at bank headquarters to minimize its fraud risk, this starts with polices for the review process of loans. According to the text, fraud is any and all means a person uses to gain an unfair advantage over another person or deliberately deceives for financial gain; in this case it was over a million dollars (Romney and Steinbart, 2010 p145). Loan procedures should establish a road map to successfully fulfill the loan policy goals, by outlining specific steps, forms, and timing for individuals responsible for the loan product offering. These procedures are detailed guidelines that build discipline, consistency and quality through every step of the process. It should clearly define who has the authorization to the empowerment to approve the loan. Authorizations are often documented by signing; initializing on a document or in this case it was loan paperwork. Employees who process the transaction should verify the presence of the appropriate authorization. This should be accompanied with the applicant’s credit report and who approved the loan. Once these things are defined it will cut the risk of fraud.
Greater Providence’s auditors detecting fraud During the investigation of Greater Providence; the state regulators examined the books of the bank and found that the internal auditors failed to detect the frauduitant act (Romney and Steinbart, 2010 p 244). It also uncovered that bank auditors do not examine all loans and only focused on larger loans, this audit should have been conducted by outside auditors. The role of an auditor is to judge the accuracy of the financial statements and report back to the board. To so this, auditors usually examine some typical transactions
Show More

Related Documents: Cost: Internal Control and Greater Providence Essay

Adolf Hitler Case Study

did not intend to say and he never blurted out a secret. Everything was the result of cold calculation” (Green, 2001, pg. 7). Hitler’s own ego was his biggest weakness. The arrogance to believe that his was a “man with a mission, marked out by Providence, and therefore exempt from the ordinary cannons of human conduct” (pg. 9). Hitler also had no respect for any type of God or higher being, deeming himself as a supreme deity in his own eyes. Anyone that believes they are on a divine mission to destroy…

Words 2276 - Pages 10

The Strategic Management Process: Ben & Jerry’s Ice Cream Essays

The Strategic Management Process: Ben & Jerry’s Ice Cream Background In 1978, with a $5 ice cream making correspondence course from Penn State University and $12,000, childhood schoolmates Ben Cohen and Jerry Greenfield started an ice cream business in a renovated gas station in Burlington, Vermont. Ben and Jerry’s quickly grew into a leading worldwide ice cream manufacturer, known for its innovative flavors and all-natural ingredients made from fresh Vermont milk and cream. Early flavors…

Words 3268 - Pages 14

Essay on Costco: Internal/External Analysis

Costco:Internal / External Analysis Table of Contents INTERNAL ANALYSYS: • About Costco • Mission Statement • Corporate Governance & Stakeholder Management • Locations • Strategic Objective • Primary Activities • Support Activities • Costco Membership • Financial • Net Income • Net Sales • Membership Fees • Gross Margin • Selling, General & Administrative Expenses • Cash Flows • Expansion Plans • Conclusion EXTERNAL ANALYSIS • Demographics • Socio-cultural • Political/Legal…

Words 7771 - Pages 32

ECON 7200 Economic Principles M Semester 2 2013 Course Profile DUFE Essay

7200 Economic Principles (M) DUFE 1. General Course Information 1.1 COURSE DETAILS Course: ECON 7200 Economic Principles (M) Coordinating Unit: School of Economics, Faculty of the Professions Teaching Period: Semester 2 Year: 2013 Mode: Internal Level: Postgraduate Coursework Location/s: DUFE Units: 3 Contact: 4 hours per week Prerequisites: Not applicable Co-requisites: Not applicable Incompatible: Not applicable Assumed Knowledge: Not applicable Restrictions: Available to M Commerce,…

Words 6839 - Pages 28

Essay about Media Myth P

Pedro Hespanha Introduction Social policies are intervention instruments developed by the state to provide for the wellbeing and social protection of citizens and include actions to prevent social risk or to resolve existing social problems. In the case of the poor, social policies cover a wide range of problems and aim to respond in ways which ensure minimum standards of wellbeing. Although the range and effectiveness of these policies varies greatly from one society to another, in general the…

Words 6792 - Pages 28

Essay on Procurement in Oil and Gas Industry in Developing Countries Nigeria Agip

Procurement in Oil and Gas Industry in Developing Countries A Case of AGIP Nigeria Name Course Professor Date Abstract This is a thesis about procurement process in the oil and gas industry in Nigeria with specific stress on AGIP Nigerian AGIP Energy and Natural Resource.” The report starts with an introduction to the country Nigeria itself. It develops with the research on the oil and gas sector in the country and then focuses on the AGIP and its operations. Thus the first section comprises…

Words 12230 - Pages 49

Books: Intimate Partner Violence Essay example

The longer the violence goes on, the more serious the effects. Many victims suffer physical injuries. Some are minor like cuts, scratches, bruises, and welts. Others are more serious and can cause death or disabilities. These include broken bones, internal bleeding, and head trauma. Not all injuries are physical. IPV can also cause emotional harm. Victims may have trauma symptoms. This includes flashbacks, panic attacks, and trouble sleeping. Victims often have low self-esteem. They may have a hard…

Words 6563 - Pages 27

Ban And Blyth Essay

instructions for authors and subscription information: http://www.tandfonline.com/loi/rrip20 The BRICs and the Washington Consensus: An introduction a Cornel Ban & Mark Blyth a b Boston University , Boston , Massachusetts , USA b Brown University , Providence , Rhode Island , USA Published online: 15 Apr 2013. To cite this article: Cornel Ban & Mark Blyth (2013) The BRICs and the Washington Consensus: An introduction, Review of International Political Economy, 20:2, 241-255, DOI: 10.1080/09692290.2013…

Words 7241 - Pages 29

Cognitive Radio And Networking Research At Virginia Tech

INVITED PAPER Cognitive Radio and Networking Research at Virginia Tech A large research team with a wide range of expertiseVfrom ICs and reconfigurable computing to wireless networkingVworks to achieve the promise of cognitive radio. By Allen B. MacKenzie, Senior Member IEEE , Jeffrey H. Reed, Fellow IEEE , Peter Athanas, Senior Member IEEE , Charles W. Bostian, Fellow IEEE , R. Michael Buehrer, Senior Member IEEE , Luiz A. DaSilva, Senior Member IEEE , Steven W. Ellingson, Senior Member IEEE…

Words 23283 - Pages 94

Silent Spring - Rachel Carson Essay

Silent Spring Rachel Carson Online Information For the online version of BookRags' Silent Spring Premium Study Guide, including complete copyright information, please visit: http://www.bookrags.com/studyguide-silentspring/ Copyright Information ©2000-2007 BookRags, Inc. ALL RIGHTS RESERVED. The following sections of this BookRags Premium Study Guide is offprint from Gale's For Students Series: Presenting Analysis, Context, and Criticism on Commonly Studied Works: Introduction, Author Biography…

Words 30115 - Pages 121