Question 1

-Jon Fries being the CEO was involved in making the major decisions for the company. As a result, auditors have the interest to interact with the CEO to help understand why some decisions were made. This involves even information on some transactions that seem peculiar.

-Fletcher Anderson being the COO is responsible for day to day operations within the organization, and therefore auditors will ask him questions regarding the varied operations.

-Craig Schuster is responsible for the company’s financial management and reporting given that he is the CFO. The auditors will be requesting the relevant financial information from Craig since he has access to all the relevant financial documents.

-Catherine Sprauer being the division controller is responsible for overseeing accounting, financial reporting, and control functions in the company. She would be the one mostly engaged with the auditors since she is in possession of the most-timely numbers and data regarding the company.

Question 2

Jon Fries- He was highly unethical (-100). He was the mastermind of the fraud that resulted in F&C International downfall. He made the financial statements look good for his sake without minding the implications it would have on other stakeholders.

Fletcher Anderson- He was moderately unethical (-30). He was not involved in perpetrating the fraud involved in the company but did not take appropriate measures to minimize its impact. Anderson uncovered several suspicious transactions but failed to take any remedial actions. He also did not want Catherine to disclose what she had found to ensure that he did not take part in testifying.

Craig Schuster- He was reasonably ethical (50). When he discovered issues with the inventory, he brought the matter to Anderson’s attention by providing him with a report. He then resigned as the CFO of the company since he did not want to be associated with the current affairs. However, he had failed in establishing strong internal controls to prevent such fraud.

Catherine Sprauer- She was moderately ethical (20). This is because she resigned after realizing that things were not in order in the organization, and she also notified Anderson that the company had an inventory problem. However, she did not take any action after being approached by the two employees with the fraud claims.

Question 3

If I were in Catherine Sprauer’s position, I would have approached the issue quite differently. For starters, I would have listened keenly for what the employees were saying since the allegations being made were significant. This would be followed by conducting an investigation to ascertain the allegations. On confirming that the allegations were true, I would bring up the issue to my superiors and other accountants in the company to help decide on the way forward.

Question 4

Schuster had a responsibility of informing a third party of the concerns he had following his resignation. He was the company’s CFO hence had the responsibility of ensuring that the company’s financials reported a true and fair view of the company’s state. As a result, he had the responsibility of disclosing the significant problems in the financial reports since the reports were misleading the relevant stakeholders in their current status. Keeping quiet would work to show that it is like he was covering for the fraud taking place.

Question 5

As the company’s COO, upon receiving the list of warehouse Q inventory I would have taken the initiative to investigate the issue. This would help in resolving the issue by either discrediting the suspected problems or confirming that the inventory problem existed. My earlier realization that sales shipments were being delivered to the company’s warehouse instead of customers and the uncovering of the forged bill of lading would have increased my desire to investigate what was going on.

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