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Questions: 1. Identify the key factor that enabled the fraud to remain undetected for such a long period of time.2. Describe and explain weaknesses in the current accounts payable function and recommend how each weakness can be addressed. Answers: 1. The key factors that enabled the fraud to remain undetected for such a long period of time within the organization JAE Limited include firstly, the credit card portfolio is generally considered as a risky portfolio and the firm mainly depended on the credit card of Wizard Finance for business purpose (Deegan and Unerman 2011). Thus, this provides scope to enable the fraud to remain undetected within the firm for longer period. Secondly, the lack of inspection within the firm regarding the use f credit cards and within the departments also leads to fraudulent activities. Thirdly, for recovery of the money no proper measure was there within the organization. Fourthly, the management should keep an account payable manager or team in order to regulate the department systematically (Wolk, Dodd and Rozycki 2013). The head of the particular department had lack of responsibility thus the firm suffered loss. Fifthly, the firm showed laxity in identifying the payment that has not been done on time. Lastly, in previous occasion when the concerned employee Steve Ray had availed various leave, no other temporary employee was appointed to take over his responsibilities for handling the department. Therefore, the fraudulent activities that were taking place in JAE Limited were not detected for such a long period of time. 2. In the company JAE Limited, there are various weaknesses in the current accounts payable function, especially, in the current account that deals with the Wizard Finance corporate account. The most important weaknesses that have been found in the particular current accounts payable function are as follows: Weaknesses Recommendation for addressing the weakness 1. Compliance with the contractual arrangements and the requirements of the regulation. JAE Limited should not allow its higher executives to use the credit card of Wizard Finance for their personal expenses. The company should be stricter about its rules and regulations (Scott 2012). 2. Maintenance and monitoring the cash flow of the company including the regular review of the balances of debit. The cash flow should be maintained and monitored at regular interval of time in order to avoid any discrepancies. 3. Viability and sustainability of the firm JAE Limited. JAE Limited should put limitation to an amount up to which an executive can spend. This will help to put bars in the expenditure amount of the firm. 4. The relationships should be maintained and the reputation of the firm JAE Limited should be built with the organization Wizard Finance. The management of JAE Limited should maintain a regular contact with its creditor Wizard Finance in order to update the financial statements and to maintain a record of total debt (Feldmann and Rupert 2012). 5. Lack of synchronization among the management, departments and also within the department of accounts payable. The co-ordination among the members of the accounts payable department should be increased (Glautier, Morris and Underdown 2011). The accounts payable manager should be more active towards his work and department and should also be more responsible towards his work. Description of the Weaknesses of the current accounts payable function: 1. Compliance with the contractual arrangements and the requirements of the regulation The organization JAE Limited should ensure about the agreements or the contractual arrangements that it has made with the organization Wizard Finance and accordingly they should follow the required regulations in order to run the business smoothly. As per the contractual arrangements, the firm JAE Limited should operate its business within the contractual boundaries and also within the requirements that have been imposed by the regulator like the norm of paying the debit on time or debt recovery costs and the late payment interest should be paid to Wizard Finance if JAE Limited pays in late (Scott 2011). However, JAE Limited was not abiding by the regulations and contractual arrangements of the organization Wizard Finance that resulted into a huge loss due to implementation of undetected fraud within the firm for a long period of time. 2. Maintenance and monitoring the cash flow of the company including the regular review of the balances of debit The management of the organization JAE Limited should monitor the cash flow of the firm at regular interval of time and should also maintain it in order to prevent any loss within the organization. Monitoring the cash flow at regular interval helps the management to get aware of any surpluses or shortfalls of cash within the firm and accordingly helps to manage them. In addition to accounts payable can provide regular reports that help the management of the organization to take decisions based on the cash flow (Devine 2012). However, this maintenance and monitoring of the cash flows of the organization JAE Limited was not present that leads the organization to suffer. 3. Viability and sustainability of the firm JAE Limited The firm JAE Limited should get ensure about the fact that they do not get affected their long term viability by taking excess debt or liability from the organization Wizard Finance. Within the firm JAE Limited, there was no limitation for using the credit card of Wizard Finance for the business purpose, there was neither any limitation regarding the numbers of times of using the credit card of Wizard Finance nor there was any limitation regarding the amount of expenditure an individual can spent. The data that is available in the accounts payable function can easily assist the department of management for monitoring the financial performance (Deegan and Unerman 2011). 4. The relationships should be maintained and the reputation of the firm JAE Limited should be built with the organization Wizard Finance The organization JAE Limited should maintain a good relationship with its creditor Wizard Finance as JAE Limited takes debt from the other firm. Generally, an accounts payable function has liaison on a regular basis with its creditor and thus it can develop relationships by discussing payment terms, invoices and timing of payments (Boateng 2013). However, in this case study, JAE Limited did not maintain a regular contact with Wizard Finance and thus the firm was unaware about its huge amount of debt. 5. Lack of synchronization among the management, departments and also within the department of accounts payable All the management departments of the organization JAE Limited had lack of synchronization. Even the head of the accounts payable department was not concerned about the fraudulent activities that were taking place in his department by the accounts payable clerk named Steve Ray. The head team members and executives were not aware of the activities performing by the clerk. This can be stated as the lack of coordination among the department itself. References Boateng, P. (2013).Principles of accounting theory. [Place of publication not identified]: Dog Ear Publishing, Llc. Deegan, C. and Unerman, J. (2011).Financial accounting theory. Maidenhead, Berkshire: McGraw Hill Education. Devine, C. (2012).Accounting theory. Routledge. Feldmann, D. and Rupert, T. (2012).Advances in accounting education. Bingley, U.K.: Emerald. Glautier, M., Morris, D. and Underdown, B. (2011).Accounting. Harlow, England: Financial Times/Prentice Hall/Pearson. Scott, W. (2011).Financial accounting theory. Toronto, Ont.: Pearson Canada. Scott, W. (2012).Financial accounting theory. Toronto: Pearson Prentice Hall. Wolk, H., Dodd, J. and Rozycki, J. (2013).Accounting theory. Thousand Oaks: SAGE Publications.