Problem
Jessica is the Accounts Payable Manager for Kute Kiddies, a retailer of designer clothing for children up to 10 years of age. The business has two retail outlets and a thriving online store. Kute Kiddies has recently changed accounting systems and the business is struggling to ensure that appropriate controls are put in place for the new system as the provider went into liquidation a week after the account system was installed. Jessica's husband has recently been made redundant due to the COVID-19 closure of the restaurant where he was a chef. He is now at home with their three school age children. To keep all staff employed, Kute Kiddies has advised that all staff will need to take a 25% pay cut until the business is able to recover from the effects of COVID, but has advised that by reducing pays, the business will not need to make any staff redundant. Jessica is facing rising credit card debt and private school fees are due for all three of her children.
Consider the elements of Opportunity and Pressure of Cressy's Fraud Triangle and explain the red flags that would concern you and why?