For each of the following independent cases of employee fraud, recommend how to prevent similar problems in the future:
Hints:
* Use bullet lists to itemize at least six to ten answers for each scenario
* On the book, they probably have the solutions manual but it’s better not to use it
* Application controls, not general control!
* Focus on preventive controls
* Brainstorming certainly helps!
CASE A
Due to abnormal inventory shrinkage in the audiovisual department at a retail chain store, internal auditors conducted an in-depth audit of the department. They learned that a customer frequently bought large numbers of small electronic components from a certain cashier. The auditors discovered that they had colluded to steal electronic components by not recording the sale of items the customer took from the store.
CASE B
During an unannounced audit, auditors discovered a payroll fraud when they distributed paychecks instead of department supervisors. When the auditors investigated an unclaimed paycheck, they discovered that the employee quit four months previously after arguing with the supervisor. The supervisor continued to turn in a time card for the employee and pocketed his check
CASE C
Auditors discovered an accounts payable clerk who made copies of supporting documents and used them to support duplicate supplier payments. The clerk deposited the duplicate checks in a bank account she had opened using a name similar to that of the supplier.