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BOC CASE

 BOC CASE Essay

BOC CASE

Yimin Tu

1 . Using Kimmel et al. 's (2011) principles of control actions (described in Figure 6), identify the internal control weaknesses that contributed to the BOC fraud incident.

BOC has no independent internal verification. Traditional bank managers had insider power to make financial loans and transfer funds with out controls. The previous general director at BOC Kaiping part made loans and transferred fund to Ever Joint to pull in profits to get himself. There is not any second person to check and regulate the manager's authority. Zero permission to remit cash abroad was granted with a BOC older branch administrator. (source: case) The home window companies do not separation of duties. Xu and his gang helped produce two windows companies because vehicles to get BOC Kaiping funds. 1 company is definitely Ever Joint. Hui's partner were both equally directors and mangers of EJ and was the signatory of its bank account. (source: case)

2 . Whenever you reflect on the fraud triangular, what economic, organizational, institutional, or social factors from the fraud triangle helped engender the defined fraud occurrence?

Justification: weak honest values. Guanxi cultivates problem. Family positioning leads to scams. case Chance: Inadequate inner control and supervision over managers activities. case Offers: personal gains of true properties and stocks case

3. Review Figure a few and do extra research in COSO's Interior Control—Integrated Platform. Focusing on ‘‘Effectiveness and Effectiveness of Operations, '' go over how a bank manager would design an indoor controls system to reduce the risk of financing to nonperforming borrowers.

Control actions: Have self-employed personnel to limit and supervise managers' authority, just like loan endorsement committees to evaluate lenders' advantage based on credit and business purposes. Circumstance Control environment:  integrity of top supervision is the most important control environment issue. Managers need to demonstrate to their employees that they...

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