Financial Investigation: Internet Assignment:The following article is related to deterring employee fraud within organizations and answers some related questions.

After reading the case, answer the following questions: Read the article the following article: Wells, J. T. (2004, December). Small business, big losses. Journal of Accountancy, 198(6), 42-47.

Retrieved from Business Source Complete database. Article:Small Business, Big Losses. .Authors:Wells, Joseph T.1,2 :Journal of Accountancy. Dec2004, Vol. 198 Issue 6, p42-47. 6p. 11 Charts. .Document Type:Article.Subject Terms:*FRAUD *SMALL business *FINANCIAL statements *ACCOUNTING *AUDITING.NAICS/Industry Codes:541219 Other Accounting Services.Abstract:

This article summarizes some of the key findings of certified fraud examiners in cases that were investigated by the 2004 Report to the Nation on Occupational Fraud and Abuse.

The report from the Association of Certified Fraud Examiners, caused over $761 million in total losses, with a disproportionate percentage committed against small businesses--almost half of the frauds in the study took place in businesses with fewer than 100 employees. Not surprisingly such businesses are less likely to be audited or employ anti-fraud measures than the larger firms. Several conclusions can be drawn from the 2004 report.

First, though the losses have been stable over the years, the fact that in one year alone they are approaching $660 billion is a cause for concern.

Second, although large financial statement frauds receive the most attention, they are relatively uncommon compared to asset misappropriations and corru ption.

Third, small businesses remain the most vulnerable to occupational fraud because of three factors: they are the least likely to have an audit, a hotline or adequate internal controls. Fourth, audits--both internal and external--although excellent prevention devices are not the most effective means of detecting frauds. Fifth, hotlines and other reporting mechanisms are a vital part of any organization's prevention efforts but should go beyond employees to vendors and customers, too.

Finally, occupational fraud cannot be eliminated but organizations that use both hotlines and auditors can greatly reduce these costly crimes. Occupational fraud schemes can be as simple as pilferage of company supplies or as complex as sophisticated financial statement frauds.

1. According to Mr. Wells, how do you measure the cost of occupational fraud?

2. Explain the three major categories of occupational fraud.

3. According to Mr. Wells, what is the best method to detect fraud? 4.What types of companies are hit the hardest by occupational fraud?

5. Explain what companies can to prevent (not detect) fraud. Your essay must be at least 200-300 words in length. If using outside sources all source citation should adhere to the guidelines of the APA style guide.Double space in font 12 roman letters.