A purchasing agent for a home improvement center is also part owner in a wholesale lumber company. The agent has sole discretion in selecting vendors for the lumber sold through the center. The agent directs a disproportionate number of purchase orders to his company, which charges above-market prices for its products. The agent's financial interest in the supplier is unknown to his employer. Required; What type of fraud is this and what controls can be implemented to prevent or detect the fraud?
A purchasing agent for a home improvement center is also part owner in a wholesale lumber company. The agent has sole discretion in selecting vendors for the lumber sold through the center. The agent directs a disproportionate number of purchase orders to his company, which charges above-market prices for its products. The agent's financial interest in the supplier is unknown to his employer. Required; What type of fraud is this and what controls can be implemented to prevent or detect the fraud?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:A purchasing agent for a home improvement center is also part owner in a wholesale lumber
company. The agent has sole discretion in selecting vendors for the lumber sold through the
center. The agent directs a disproportionate number of purchase orders to his company, which
charges above-market prices for its products. The agent's financial interest in the supplier is
unknown to his employer.
Required;
What type of fraud is this and what controls can be implemented to prevent or detect the fraud?
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