Midwest Orient Import Export Corporation

806 Words4 Pages
Case #1
Midwest Orient Import Export Corporation
Fraud Examination – ACT 565
Yuslizar Fanny (2600997)

Today, in current business-world, fraud becomes a daily occurrence and it is a serious threat for all organizations, whether they are partnerships, corporations, limited liability companies or even non-profit companies. Once perpetrators start to commit fraud, they will not stop by themselves, they will continue and commit more with the bigger number as they realize how easy it is. Therefore, fraud prevention program is very important for organizations since once a fraud has occurred then they will need a big effort to deal with it. The organizations will not only lose assets but they will lose time, legal fee, fraud investigator, negative publicity and other adverse consequences.
Fraud occurred in the Midwest Orient Import Export Corporation because there was no proper internal control in the organization. The lack of segregation of duty policies is the root cause of the fraud in the company. It is important that there are adequate segregation of duties involving custody, authorization and control of documents in the organization. The accounts payable clerk should not have the sole authority to record transactions, write all checks, and reconcile the bank account. The account payable manager should have the authorization duties in order to monitor all transactions recorded by the account payable clerk. It will allow the manager to control miscellaneous expenses and prevent
Get Access