Class, Mark is a young business student at the University of Georgia, who works part-time as a financial advisor at a local credit union

Fraud evaluation

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Symptoms of fraud in the case of Mark.

One of the evidence of fraud, in this case, is the way that Mark is spending his money. In this case, we have seen that Mark has made very expensive purchases. It is also hard to understand how Mark is making the expensive purchases when his wife doesn’t work and has a baby. There is a possibility that the reason Mark is giving is valid, but it is not a coincidence that during the time that Mark is making the expensive purchases, new customers are complaining of losses in their accounts. The complaints from the customers add the list of symptoms of fraud present in the case of Mark.

Whether mark is committing fraud.

It may be difficult to determine whether Mark has been committing fraud or not. Although Mark claims that he has inherited a significant amount of wealth from his grandmother, I can see the possibility that he is committing fraud. The complaints from the customers show that he has been taking money from new clients with the thought that they won’t complain. Mark is no doubt an intelligent man and he have been using the fraud money to make the expensive purchases in cash since any deposits in the banks would prove that he is committing fraud. In respect to the symptoms of fraud evident in this scenario, I think that Mark is committing fraud and should be investigated to determine the case. The bank should also look into the accounts of his grandmother to find out whether he has been withdrawing money from the inherited wealth to make the expensive purchases.

Reasonable action that the supervisor should take if he suspected that mark is fraud suspect.

If Mark is suspected of fraud by the company, the supervisor should collect all the necessary financial information about Mark from the public records. The when investigating mike of fraud the supervisor should transfer Mark to another department and find out whether the new clients will continue complaining about losses. Since the supervisor is not sure whether Mark is committing fraud or not he should not treat him differently or in a suspicious manner (Vona, 2011).

The supervisor should also investigate whether the grandmother Mark is claiming left him the wealth is true. If it is true that Mark inherited significant wealth from his dead grandmother, the supervisor should look at the financial information of marks grandmother. It should be clear from the financial records whether Mark has been withdrawing money from the account to make purchases or not. If Mark has not been withdrawing money from the account of his grandmother to make the purchases, he should be suspended pending official investigations.

References

Vona, L. W. (2011). The fraud audit: Responding to the risk of fraud in core business systems. Hoboken, N.J: Wiley.

Currency translation methods.

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The international accounting standards board sets the rules for translating currency. Several methods meet these standards. The currency translation methods include the current rate translation method, temporal rate translation method and monetary- non-monetary methods.

Current rate translation method.

This translation method employs functional currency translation technique that relies on the current rate when functional currency is the same as local currency. For instance in the case of a person using a British pound, applying the current rate translation method the assets and liabilities use the exchange rate the date of translation. The method is used to translate equity and retained earnings using the spot rate as the rate during exchange rate (Hoyle, 2014).

Pros of the method

The main advantage of current rate translation is that the gains or losses on translation goes directly to the reserve account but does not pass through the income statement. Another advantage of the method is that the elements in the income statement are translated at the exchange rate at the times that they were recorded ensuring that the true value is captured in the transactions (Sheikholeslami, 2006).

Cons of the method

The method fails to consider economic element. Using the end of year exchange rate to translate assets is not appropriate especially to long-term debts.

Monetary non-monetary method

Monetary assets are converted at the current exchange rate according to the method. Fixed assets are converted to the historical exchange rate.

Pros of the method.

The postal receipts and costs that are associated with non-monetary assets are not converted to the average rate. This makes sure that losses made during translation are minimized.

Con of the method.

The main disadvantage of the method is that it depends on the classification of the balance sheet in determining the appropriate exchange rate translation. This may produce inaccurate results. The method could also distort the profit margin for sales if the cost of sales is measured at the historical exchange rate translation.

Temporal method

Under the method, there are specific assets that ate translated at the exchange rate timing the creation of the asset. Gains or losses in this method are carried to the current consolidated income.

Pro of the method.

The temporal method puts more emphasis on historical market cost.  This ensures that inventory is recorded accurately unlike in the monetary method.

Cons of the method.

Posts of loss and profits are converted using average rate without considering depreciation of assets.

References

Hoyle, J. B. (2014). Fundamentals of advanced accounting.

Sheikholeslami, M. (2006). The Impact of foreign currency translation methods change on the accuracy of the financial analysts' earnings forecasts