Case of the Missing Petty Cash The case below tells the actual story of a cash embezzlement scheme. The case has two major parts: (1) problem and (2) audit approach. For the case, please consider how the auditor may have discovered the cash embezzlement scheme.ProblemThe petty cash custodian (1) brought postage receipts from home and paid them from the fund, (2) persuaded the supervisor to sign blank authorization slips the custodian could use when the supervisor was away and used them to pay for fictitious meals and minor supplies, and (3) took cash to get through the weekend, replacing it the next week. Postagereceipts were from a distant post office station the company did not use. The blank authorization slips were dated on days the supervisor was absent. The fund was cash short during the weekend and for a few days the following week. The fund was small ($500), but the custodian replenished it about every two working days, stealing about $50 each time. With about 260 working days per year and 130 reimbursements, the custodian was stealing about $6,500 per year. The custodian was looking forward to getting promoted to general cashier and bigger and better things! Audit ApproachThe audit team should discuss petty cash procedures with the custodian and supervisor, especially those that relate to situations in which the custodian or supervisor is not available to provide needed petty cash. Next, a sample of petty cash reimbursement check copies with receipts and authorization slips attached should be studied for evidence of authorization and validity. On Friday, an audit team member should count the petty cash and receipts to see that they total $500. Then the fund should be recounted later in the afternoon. (The second count should be a surprise.) The custodian or supervisor should be present at all times sothat the auditor will not be accused of theft. RequiredBased on the audit approach discussed, how would the auditor have caught this fraudulent scheme?