Danielle Tovar
ACC 340 Controllership
Southern New Hampshire University
March 5, 2021
Items Affected on the Balance Sheet
Both the annual and quarterly sales revenue of MiMedx were affected by the fraudulent
activity. Taylor and Petit's decision to orchestrate a fraud and mess up the revenue on the
shipment of stocks ruined the balance sheet's purchase records. MiMedx revenue was sinking
without public notice.
Elements of Internal Control
Electronic control over an accounting system access via passwords, lockouts, and
electronic access logs may help track transactions and keep unauthorized persons from accessing
the system. This will also help to provide a way to audit the usage of the system while providing
a way to audit the usage of the system to identify the source of errors or discrepancies. Robust
access tracking can also help deter attempts to fraudulent access of the system (Abdusalomova,
2020).
Standardizing archives utilized for monetary exchanges, like solicitations, internal
materials demands, stock receipts, and travel cost reports, can help keep up consistency in
record-keeping over the long run.
Steps to Prevent Fraud
Separation of accounting duties, especially in large firms, ensures a low risk of facing
fraud. Businesses should have separate people interchangeably taking control over accounting
functions separately or have the functions being performed through a virtual chief financial
officer with an accounting firm.
Regular auditing, especially by an external accounting firm, may help detect irregular
activities. Regular auditing, especially in areas that deal with cash, product returns inventory
management, and accounting functions, can occasionally help detect fraud in high-risk critical
business areas (Tutino et al., 2019).
Other complementary measures involve training employees to be honest in their area of
work and prevent fraud in any way. They should report any suspicious behavior or detected
pattern in the system. Putting up an anonymous reporting system might also be very helpful.