For each of the following three independent cases of employee fraud, recommend how to prevent similar problems in the future: Case A: Due to abnormal inventory shrinkage in the audiovisual department at a retail chain store, internal auditors conducted an in- depth audit of the department. They learned that a customer frequently bought large numbers of small electronic components from a certain cashier. The auditors discovered that they had colluded to steal electronic components by not recording the sale of items the customer took from the store. Case B: During an unannounced audit, auditors discovered a payroll fraud when they distributed paychecks instead of department supervisors. When the auditors investigated an unclaimed paycheck, they discovered that the employee quit four months previously after arguing with the supervisor. The supervisor continued to turn in a time card for the employee and pocketed his check. Case C: Auditors discovered an accounts payable clerk who made copies of supporting documents and used them to support duplicate supplier payments. The clerk deposited the duplicate checks in a bank account she had opened using a name similar to that of the supplier.

Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle
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For each of the following three independent cases of employee fraud, recommend how to prevent similar problems in the
future:
Case A:
Due to abnormal inventory shrinkage in the audiovisual department at a retail chain store, internal auditors conducted an in-
depth audit of the department. They learned that a customer frequently bought large numbers of small electronic
components from a certain cashier. The auditors discovered that they had colluded to steal electronic components by not
recording the sale of items the customer took from the store.
Case B:
During an unannounced audit, auditors discovered a payroll fraud when they distributed paychecks instead of department
supervisors. When the auditors investigated an unclaimed paycheck, they discovered that the employee quit four months
previously after arguing with the supervisor. The supervisor continued to turn in a time card for the employee and pocketed
his check.
Case C:
Auditors discovered an accounts payable clerk who made copies of supporting documents and used them to support
duplicate supplier payments. The clerk deposited the duplicate checks in a bank account she had opened using a name similar
to that of the supplier.
Transcribed Image Text:For each of the following three independent cases of employee fraud, recommend how to prevent similar problems in the future: Case A: Due to abnormal inventory shrinkage in the audiovisual department at a retail chain store, internal auditors conducted an in- depth audit of the department. They learned that a customer frequently bought large numbers of small electronic components from a certain cashier. The auditors discovered that they had colluded to steal electronic components by not recording the sale of items the customer took from the store. Case B: During an unannounced audit, auditors discovered a payroll fraud when they distributed paychecks instead of department supervisors. When the auditors investigated an unclaimed paycheck, they discovered that the employee quit four months previously after arguing with the supervisor. The supervisor continued to turn in a time card for the employee and pocketed his check. Case C: Auditors discovered an accounts payable clerk who made copies of supporting documents and used them to support duplicate supplier payments. The clerk deposited the duplicate checks in a bank account she had opened using a name similar to that of the supplier.
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