Question

In one of the cases in the textbook, Joe Anderson, a part-time shoe salesperson at a department store, perpetrated a fictitious returns scheme using third-party credit cards. Why was a fraud examination initiated?

1) Another employee witnessed Anderson pocketing cash and reported the incident.
2) The shoe department was losing money and had a high rate of returns on its shoes.
3) The store's surveillance camera caught Anderson pocketing the money.
4) Anderson credited the wrong account and the customer called up to inquire as to why her credit card had been credited.

Answer 1

The fraud examination was initiated because another employee reported seeing Joe Anderson pocketing cash from a fictitious returns scheme. This highlights the importance of vigilance and proper procedure in detecting and preventing fraudulent activities in various business contexts.

Step-by-step explanation:

The fraud examination on Joe Anderson, a part-time shoe salesperson, was initiated because another employee witnessed Anderson pocketing cash and reported the incident. Anderson was involved in a fictitious returns scheme using third-party credit cards, which was recognized when the eyewitness account triggered the investigation into his fraudulent activities. This kind of fraud is often part of broader concerns related to theft, identity theft, and True-name Fraud, where individuals use someone else's information without permission. Ensuring that proper procedures are followed and maintaining close surveillance can help prevent such fraudulent behavior and protect both the customers and the business.

When faced with accusations of theft, an individual could use techniques like Appeal to a Higher Authority to justify their actions, although this would not typically stand in a legitimate fraud examination. Understanding the implications of theft and the mental accounting related to financial decisions, such as carrying high credit card debt while separately maintaining a savings account, is crucial in recognizing potential fraud.