12 o’clock, when the plant whistle sounded, George Jones, an assistant auditor, had been working on his laptop computer. Jones stopped work immediately, but not wanting to waste a lot of time, he simply closed his laptop. He then departed for lunch. The auditor-in-charge, who had been observing what was going on, was critical of the assistant’s actions. What do you think was the basis for criticism by the auditor-in-charge

12 o’clock, when the plant whistle sounded, George Jones, an assistant auditor, had been working on his laptop computer. Jones stopped work immediately, but not wanting to waste a lot of time, he simply closed his laptop. He then departed for lunch. The auditor-in-charge, who had been observing what was going on, was critical of the assistant’s actions. What do you think was the basis for criticism by the auditor-in-charge

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter3: Internal Control Issues

Section3.8: The Boeing Company

Problem 6Q

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Charles Hart, an accounts payable clerk, is an hourly employee. He never works a minute past 5 PM unless the overtime has been approved. Charles has recently found himself faced with some severe financial difficulties. He has been accessing the system from his home during the evening and setting up an embezzlement scheme. As his boss, what control technique(s) discussed in this chapter could you use to help detect this type of fraud?
Charles Hart, an accounts payable clerk, is an hourly employee. He never works a minute past 5 P.M. unless the overtime has been approved. Charles has recently found himself faced with some severe financial difficulties. He has been accessing the system from his home during the evening and setting up an embezzlement scheme. As his boss, what control technique(s) discussed in lectures network risks and auditing could you use to help detect this type of fraud?
Donald Waddell got a job at the Boyce Thompson Institute for Plant Research. Waddell did not have an employment contract for a fixed term, and the institute’s employee manual said that his job was “terminable at will.” Soon after he was hired, the institute implemented a whistleblower policy designed to encourage “the highest standards of financial reporting and lawful and ethical behavior.” Waddell repeatedly told his supervisor, Sophia Darling, that she needed to file certain financial documents more promptly. Darling fired Waddell, telling him that he was disrespectful and insubordinate. Define “at will” employment and wrongful termination. Based on the evidence given, was Waddell wrongfully terminated? Why, or why not.
John Smith worked in the stockyard of a large building supply company. One day he unexpectedly left for California, never to return. His foreman seized the opportunity to continue to submit time cards for John to the payroll department. Each week, as part of his normal duties, the foreman received the employee paychecks from payroll and distributed them to the workers on his shift. Because John was not present to collect his paycheck, the foreman forged John’s name and cashed it.Describe two control techniques to prevent or detect this fraud scheme.
Centurion Homes of Calgary, Alberta, builds houses and has four construction crews. The supervisors hire and terminate workers and keep their hourly records. Each Friday morning, the supervisors telephone their workers’ hours to the home office, where accountants prepare the weekly pay cheques. Around noon, the supervisors pick up the pay cheques. They return to the construction site and pay the workers at day’s end. What is the internal control weakness in this situation? Propose a way to improve the internal controls.
Please read the following and identify any internal control principles that may be violated in the Jane Hardware store.(identify what could go wrong and what controls Jane Hardware should put in place to prevent it) Jerry Finch has worked for Jane Hardware for many years, Jerry has been a model employee. He has not taken a vacation in over three years, always stating that work was too important. One of Jerry's primary jobs at the store is to open mail and list the checks received. He also collects cash from customers at the store's outdoor nursery area. There are times that things are so hectic that Jerry does not bother to use the register, simply making change from cash he carries with him. When things slow down at the store Jerry often offers to help Cindy(the Accounting Clerk) post payments to the customer's accounts receivable ledger. Cindy is always happy to receive help since she is also quite busy and because Jerry is such a careful worker.
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You are the audit senior in charge of the audit of Malaika Company and have been informed by your audit manager that during the year a fraud occurred at the client. A payroll clerk set up fictitious employees and the wages were paid into the clerk’s own bank account. This clerk has subsequently left the company, but the audit manager is concerned that additional frauds have taken place in the wages department. Required: i) Describe six procedures which should be undertaken during the audit of wages as a result of the manager’s assessment of the increased risk of fraud.
All-Around Sound Co. discovered a fraud whereby one of its front office administrative employees used company funds to purchase goods such as computers, digital cameras, and other electronic items for her own use. The fraud was discovered when employees noticed an increase in the frequency of deliveries from vendors and the use of unusual vendors. After some investigation, it was discovered that the employee would alter thedescription or change the quantity on an invoice in order to explain the cost on the bill.What general internal control weaknesses contributed to this fraud?
Boxes-and-Stuff, a box-packing and mailing company in a small town along the Gulf Coast, lost a key employee last month when its accounting manager was fired for embezzling company money. Now, the owners of Boxes-and-Stuff, Jerome and Natalia, need to find another accounting manager—fast. But as they hurry to fill the position, they don’t want to select a dishonest or incompetent employee. They need to be cautious. Fortunately, the police chief found the embezzled funds in a bank account set up by the former employee and authorized the return of the money. This means that Boxes-and-Stuff will not lose the embezzled amount, after all. However, Jerome and Natalia are already thinking of ways to protect their company from other risks. They want to be prepared for risky situations in the future. 1. Which risks do you think Boxes-and-Stuff might face? 2. How do you think the company should handle the risks you’ve identified?