11.4 The assistant finance director for the city of Tustin, California, was fired after city of-ficials discovered that she had used her access to city computers to cancel her daugh-ter's $300 water bill. An investigation revealed that she had embezzled a large sum ofmoney from Tustin over a long period. She was able to conceal the embezziement forso long because the amount embezzled always fell within a 2% error factor used by thecity's internal auditors. What weaknesses existed in the audit approach? How could theaudit plan be improved? What internal control weaknesses were present in the system?Should Tustin's internal auditors have discovered this fraud earlier?

Internal controls are a collection of formal and administrative measures taken by a company to…

11.4 The assistant finance director for the city of Tustin, California, was fired after city of- ficials discovered that she had used her access to city computers to cancel her daugh- ter's $300 water bill. An investigation revealed that she had embezzled a large sum of money from Tustin over a long period. She was able to conceal the embezzlement for so long because the amount embezzled always fell within a 2% error factor used by the city's internal auditors. What weaknesses existed in the audit approach? How could the audit plan be improved? What internal control weaknesses were present in the system? Should Tustin's internal auditors have discovered this fraud earlier?

11.4 The assistant finance director for the city of Tustin, California, was fired after city of- ficials discovered that she had used her access to city computers to cancel her daugh- ter's $300 water bill. An investigation revealed that she had embezzled a large sum of money from Tustin over a long period. She was able to conceal the embezzlement for so long because the amount embezzled always fell within a 2% error factor used by the city's internal auditors. What weaknesses existed in the audit approach? How could the audit plan be improved? What internal control weaknesses were present in the system? Should Tustin's internal auditors have discovered this fraud earlier?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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