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STRATEGIC ISSUES...ONLINE    
For week of August 15, 2005, Issue #225
 
Featured Articles:
1.  You No Longer Need to Submit Questionable W-4s
2.  Focus on Fraud
3.  Tech Tip Weekly: Customize the MS Outlook Express Window Layout
4.  Compliance Calendar
 
1.  You No Longer Need to Submit Questionable W-4s
 
Temporary and proposed regulations eliminate the requirement that you send copies of potentially questionable Forms W-4 (QW-4s) to the IRS.  The new regulations are effective retroactively to April 14, 2005. 
 
Rather than having employers automatically submit the QW-4s, the IRS will use information provided on W-2s to identify employees who do not have enough federal income tax withheld from their paychecks.  Forms W-4 will still be under review by the IRS.  But by making more effective use of information reported on wage statements, the IRS will be able to increase withholding compliance -and reduce your role in the progress.
 
Wait for instructions.  In the past, you had to be on the alert for W-4 "red flags."  If you received a Form W-4 on which an employee claimed more than 10 allowances, or claimed complete exemption from withholding if $200 or more in weekly wages was expected, it was up to you to notify the IRS by forwarding the questionable W-4 to the IRS.
 
Under the new regulations, you will have to submit QW-4s if you receive a written notice from the IRS directing you to do so.  (The IRS notes that future published guidance may set additional specific criteria that would trigger a required W-4 submission.)
 
Same as before.  In cases where a serious under-withholding problem is found for a particular employee, the IRS will notify you to withhold income tax from that employee's wages at a more appropriate rate. 
 
2.  Focus on Fraud:  Put Your Fraud Knowledge to the Test - Part III
 
Here are the answers to last week's two sample questions (repeated here) typical to the CFE Exam in the Criminology and Ethics section.
 
3.  Blue, a fraud offender, had no known history of criminality.  One theory of crime causation suggests that people are not inherently bad, but rather are taught to commit crime through life's experiences.  This is called the:
 
a.  social causation theory
b.  trait theory
c.  social learning theory
d.  none of the above
 
C. is Correct
The social learning theory is the one most relevant to criminology, since it includes the acquisition of criminal behavior patterns.  Social learning theorists, notably Albert Bandura, argue that people are not born with the ability to act criminally, but that they learn to be aggressive and commit crime through life's experiences.  Social learning theorists believe criminality is learned through a process called behavior modeling.  In modern society, criminal and aggressive acts usually are modeled after three principal sources:  family members, environmental experience, and mass media.
 
4.  According to research, most embezzlers decide to commit their crimes because:
 
a.  they are essentially dishonest
b.  they are living beyond their means
c.  they have drug problems
d.  none of the above
 
B. is Correct
Donald R. Cressey found in a 1953 study of embezzlers that most of those he examined "had lived beyond their means for some time before deciding to embezzle."  Later authors have extended this statement more generally, remarking, "The most interesting fact about the white-collar offenders' aggregate financial status is not the value of their assets but the extent of their liabilities."  Offenders often "have the material goods associated with successful people but may barely be holding their financial selves together."  These people have assembled a structure of respectability, but it is often built on the sands of debt.
 
This week's new questions in the section Financial Transactions:
 
5.  A control technique commonly used in computerized systems which checks each source document against a detailed list process by the computer is referred to as:
 
a.  computer sequence checking
b.  computer matching
c.  one-for-one checking
d.  none of the above
 
6.  Cain, the authorized signer on his company's accounts, prepared and signed a check payable to the company's plumber.  He gave the check to Baker, his secretary, and asked her to mail the check to the plumber.  Instead, Baker took the check home, signed the plumber's name on the back and had her husband cash the check at their grocery store.  according to Occupational Fraud and Abuse, Baker committed which of the following schemes?
 
a.  an altered payee scheme
b.  a forged endorsement scheme
c.  a forged maker scheme
d.  an unauthorized maker scheme
 
3.  Tech Tip Weekly:  Customize the MS Outlook Express Window Layout
 
To create the most efficient workspace in MS Outlook express, you can use the Folder Bar and Layout features.  It's easy!
 
1.  Choose View, Layout to open the Window Layout Properties dialog box.
2.  Click in various check boxes in the Basic section to select items to display in separate panes.
3.  Select various options in the Preview Pane section to preview a message selected in the Inbox, Outbox, Drafts, Sent Items, or Deleted Items folders.
4.  Click OK to apply and save all your layout settings.
 
4.  Compliance Calendar
 
August 17
-Employers deposit Social Security, Medicare and withheld income tax for payments July 30, 31 and August 10, 11, and 12.
 
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