Fraud Examination
5th Edition
ISBN: 9781305079144
Author: W. Steve Albrecht, Chad O. Albrecht, Conan C. Albrecht, Mark F. Zimbelman
Publisher: Cengage Learning
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Chapter 4, Problem 9SC
To determine
The internal control weakness that results to the occurrence of fraud.
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Question 32
Which of the following is LEAST indicative of fraudulent activity.
Numerous cash refunds made to different people at the same PO box.
Several credit memos cannot be located to support reductions in customers' balances.
Bank reconciliation has no outstanding checks or deposits in transit older than fifteen days.
Three people were absent the day the auditors handed out paychecks and these checks were not picked up until four weeks later.
3. Billy Goodshoes
Billy Goodshoes is one of two Accounting Department assistant managers at Kvetch Textiles, Inc. Last week Billy noticed that Sam Clueless, the other assistant manager who is in charge of petty cash disbursements, among other things, withdrew what appeared to be a sizeable amount of currency from the fund without inserting a voucher to evidence withdrawal. Billy didn’t think much of it until the internal auditors detected a $100 discrepancy during their recent count of petty cash. Billy was told by one of the auditors that these discrepancies had been increasing in frequency and amount over a number of months. According to the auditor, Sam had explained the differences as due to lax documentation procedures on his part. Sam promised to begin a new program whereby funds would not be disbursed in the future until petty cash vouchers were submitted and approved in advance.
Question: Assume you are Billy Goodshoes. You have No obligations in this case.
Group of…
Assume that brooke miles accounts payable clerk for west coast design inc.stole $48,350 by paying fictitious companies and cashed the checks at a local banks. Describe a control procedure that would have prevented or detected the fraud?
Chapter 4 Solutions
Fraud Examination
Ch. 4 - Prob. 1DQCh. 4 - Prob. 2DQCh. 4 - Prob. 3DQCh. 4 - Prob. 4DQCh. 4 - Prob. 5DQCh. 4 - Why is it important to inform outside vendors of...Ch. 4 - Prob. 7DQCh. 4 - Prob. 8DQCh. 4 - Prob. 9DQCh. 4 - Prob. 10DQ
Ch. 4 - Prob. 11DQCh. 4 - Prob. 12DQCh. 4 - Prob. 1TFCh. 4 - Prob. 2TFCh. 4 - Prob. 3TFCh. 4 - Prob. 4TFCh. 4 - Prob. 5TFCh. 4 - Prob. 6TFCh. 4 - Prob. 7TFCh. 4 - Prob. 8TFCh. 4 - Prob. 9TFCh. 4 - Prob. 10TFCh. 4 - Prob. 11TFCh. 4 - Prob. 12TFCh. 4 - Creating an expectation of punishment causes firm...Ch. 4 - 1. People will often be dishonest if they are...Ch. 4 - Prob. 2MCQCh. 4 - Prob. 3MCQCh. 4 - Prob. 4MCQCh. 4 - Prob. 5MCQCh. 4 - Prob. 6MCQCh. 4 - Prob. 7MCQCh. 4 - Prob. 8MCQCh. 4 - Prob. 9MCQCh. 4 - Prob. 10MCQCh. 4 - Prob. 11MCQCh. 4 - Prob. 12MCQCh. 4 - Prob. 13MCQCh. 4 - Prob. 1SCCh. 4 - Prob. 2SCCh. 4 - Prob. 3SCCh. 4 - Prob. 4SCCh. 4 - Case 5 While performing an audit of TCC...Ch. 4 - Prob. 6SCCh. 4 - Prob. 7SCCh. 4 - Prob. 8SCCh. 4 - Prob. 9SCCh. 4 - Prob. 10SCCh. 4 - Prob. 11SCCh. 4 - Prob. 12SCCh. 4 - Prob. 13SCCh. 4 - Prob. 14SC
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- 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?arrow_forwardAssume that Brooke Miles, accounts payable clerk for West Coast Design Inc., stole $48,350 by paying fictitious invoices for goods that were never received. The clerk set up accounts in the names of the fictitious companies and cashed the checks at a local bank. Please use at least 150 words to describe a control procedure that would have prevented or detected the fraud.arrow_forwardCharles 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?arrow_forward
- Computer Frauds and Missing Control Procedures. The following are brief stories ofactual employee thefts and embezzlements perpetrated in an IT environment.Required:What type of control procedure that might have prevented or detected the fraud was missingor inoperative?a. An accounts payable terminal operator at a subsidiary entity fabricated false invoicesfrom a fictitious vendor and entered them in the parent entity’s central accounts payable/cash disbursement system. Five checks totaling $155,000 were issued to the “vendor.”b. A bank provided custodial and record-keeping services for several mutual funds. Aproof-and-control department employee substituted his own name and account numberfor those of the actual purchasers of some shares. He used the accounting informationsystem to conceal and shift balances from his name and account to names and accountsof the actual investors when he needed to avoid detection because of missing amounts inthe investors’ accounts.c. The university’s…arrow_forward8. DIGITAL FRAUD In a financial fraud case, city employees in Brooklyn, New York, accessed digital databases to defraud the city of $20 million. Several employees, in collusion with the former deputy tax collector, completely erased or reduced $13 million in property taxes and $7 million in accrued interest that taxpayers owed. In exchange for this service, the taxpayers paid the employees involved bribes of 10 to 30 percent of their bills. Required Discuss the control techniques that could prevent or detect this fraud.arrow_forward
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