Provide a 1 to 2 Page Answer to the question. (please cite all references and the layout should be apa style)

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Question 5

While performing an audit of TCC Corporation, the audit
team noticed something that didn’t look right. The company’s receivables aging
report showed that bank loan eligible receivables were approximately $91
million. The audit team calculated the bank loan eligible receivables to be
approximately $50 million. The client didn’t identify specific accounts in
writing off bad debts, there was extremely slow credit memo processing, and
items that management had not focused on remained uncollectible and ineligible
for financing. In addition, over the last two years, the company’s credit
department has had unusually high turnover—four different people had held the
credit manager position under an intimidating CFO. The cur- rent credit manager
was a friend of the CFO and had worked with him at a previous company. After
looking at some invoices and asking about customer information to confirm, the
credit manager admitted to creating false documents and arranging fictitious
sales with clients all with the knowledge of the CFO.

1.What are some of the red flags that
point to the possibility of fraud?

2. What will you say was the main problem in this
case that allowed the fraud to occur?

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