Barbara was a trusted employee of ABC Corporation, where she was employed as a bookkeeper. ABC Corporation produces popular video games.
In her position, Barbara opened the mail, counted the money or the checks in those envelopes, and was supposed to post the payments to the customers' outstanding balances in the Accounts Receivable account. Then, she would prepare the bank deposit slips and bring the deposits to the bank. At the end of every month, Barbara would prepare a bank reconciliation. Because she was a trusted employee, no one ever reviewed her work.
After work, Barbara went to the casinos because she was addicted to gambling. In fact, she was deeply indebted to loansharks who were threatening to take collection action against her. Sometimes, the money she used to gamble came from the envelopes of the corporation's customers. She reasoned that she needed only that one big win to pay back the loansharks and the corporation.
The president of the corporation has recently been getting telephone calls from customers who have not gotten a receipt for their payments. The president does some investigating and Barbara confesses to him. The corporation decides not to take any legal action against Barbara.
Required:
1. What type of fraud is Barbara committing?
2. What is the difference between fraud committed by employees and fraud committed by managers?
3. Give at least three reasons why the corporation might decide not to take any action, legal or otherwise, against Barbara