Derrick Bostrom is an accounting clerk at Puppet Company. He recently entered an invoice for payment to Meat Inc. The invoice number was 12658x; however, upon inspection of Meat Inc.'s account, it was determined that Meat does not use letters as part of their invoice numbering system. Furthermore, Meat submitted invoice 12658 last month for a different dollar amount. There was documentation (purchase order and receiving slip) to back-up invoice 12658x, but the supporting documentation doesn't look "right". For instance, the company logo is missing and the word "purchase" was misspelled. In addition, the address of Meat Inc. was changed to a P.O. Box last week. What type of fraud might be occurring?
Derrick Bostrom is an accounting clerk at Puppet Company. He recently entered an invoice for payment to Meat Inc. The invoice number was 12658x; however, upon inspection of Meat Inc.'s account, it was determined that Meat does not use letters as part of their invoice numbering system. Furthermore, Meat submitted invoice 12658 last month for a different dollar amount. There was documentation (purchase order and receiving slip) to back-up invoice 12658x, but the supporting documentation doesn't look "right". For instance, the company logo is missing and the word "purchase" was misspelled. In addition, the address of Meat Inc. was changed to a P.O. Box last week. What type of fraud might be occurring?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Derrick Bostrom is an accounting clerk at Puppet Company. He recently entered an
invoice for payment to Meat Inc. The invoice number was 12658x; however, upon
inspection of Meat Inc.'s account, it was determined that Meat does not use letters
as part of their invoice numbering system. Furthermore, Meat submitted invoice
12658 last month for a different dollar amount. There was documentation (purchase
order and receiving slip) to back-up invoice 12658x, but the supporting
documentation doesn't look "right". For instance, the company logo is missing and
the word "purchase" was misspelled. In addition, the address of Meat Inc. was
changed to a P.O. Box last week. What type of fraud might be occurring?
4
Personal purchases
Non-accomplice vendor
Shell company
False purchase requisition
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