+1-415-670-9189
info@expertsmind.com
Discuss five procedures that alerted the auditor to fraud
Course:- Other Subject
Reference No.:- EM132320634




Assignment Help
Expertsmind Rated 4.9 / 5 based on 47215 reviews.
Review Site
Assignment Help >> Other Subject

Accounting Information Systems and Processes Assignment -

Scenario "A" - A major Australian Public Company ran promotions advertising for a number of its products through a promotions company. The promotions company falsely inflated the number of responses it received from purchasers of the company's product. The false number of respondents was invoiced by the promotions company to the public company resulting in the overpayment of thousands of dollars. The records kept by the promotions company were those on its computer database as well as manual batch numbers of responses to the promotions.

REQUIRED - Identify five (5) procedures and checks that would have reduced the risk to the victim company?

Scenario "B" - You were engaged to conduct an examination on an Australian subsidiary of an American company following a discovery by the financial controller that freight and travel expenses were too high during a certain period. You have found the following:

The entries posted to the general ledger were examined and it was found that whereas normal expenses would be $10,000 to $12,000 for a particular month, they were in fact $33,442.19. Entries posted to the freight account were checked and in some cases there were no corresponding invoices.

Staff were frustrated in their efforts because the trade payables clerk, who was responsible for the payment of accounts and cashing of wages cheques, was either off sick or evasive when questioned.

The system for the payment of accounts was that the trade payables clerk would prepare a cheque to pay an invoice and would then present the cheque with the invoice and relevant documents for signing by two authorised signatories.

All company accounts were paid by cheque; the only cheques used to obtain cash were wages cheques. This would be done by stamping the reverse of the cheque with the words, 'Please pay cash'; the trade payables clerk would then present the cheque to the bank and obtain the cash. Specimen signatures were, of course, held at the bank but they were rarely checked as the trade payables clerk was so well known to bank staff.

Duplicate cheques had been issued for payment of accounts already paid by the company and cashed at the bank by the trade payables clerk. The signatures on the cheques were, in some cases, forgeries and, in other cases, genuine (obviously people were signing things without due care). A payment of $6,217.60 was used to pay a travel company for a trip for two to Tahiti - the clerk had cancelled this entry with the words, 'OK paid by me'.

When questioned, the trade payables clerk said that she had used her own cheque to pay for the travel. You checked with the travel company and found that, in fact, a company cheque had been used for the trip. You and officials of the company called in local detectives and all parties adjourned to the local police station. By this time, it was outside office hours and police were unable to contact the travel agent themselves and had no documentation to rely on to negate the clerk's story. The clerk was released for further investigation by them, but the clerk left the country and is now living happily in Greece, $164,000 richer.

Required -

1) Identify and discuss which internal control could have prevented this fraud and give five (5) examples

2) Identify and discuss five (5) procedures could have alerted the auditor to the fraud?

Answered:-

Verified Expert

The present solution is based on a given case study (Australian Public Company). The solution is made in the form of answers to the given questions. All the contents present are unique and is prepared according to the instruction, rubrics, and case study provided. The content is completely free from any type of plagiarism. The final form of the solution is submitted in Microsoft Word document file. The references used were cited in APA format.



Put your comment
 
Minimize


Ask Question & Get Answers from Experts
Browse some more (Other Subject) Materials
James goes to work for Tupac, Inc., a local construction company, as a salesperson. Tupac, Inc. provides James with a computer and internet connection as part of the job.
Why was the workers strike so damaging to Hostess and why was Hostess struggling prior to the workers' strike - Hostess management is more responsible for the downfall of Host
Identify any mistaken behaviors you observed as well as any triggers (causes) that you observed -  Describe the circumstances briefly and identify the area(s) of development
Construct a 90% confidence interval for the population proportion of students who believe the mascot should be changed. Based on the sample findings and associated confidence
Consider a planetary nebula at a distance d. We measure with the Doppler effect that the shell is expanding at a speed of 25 km/s. Calculate the distance to the nebula in lig
Explain how the various aspects of criminal justice relate to one another (the concept, process, system, and agencies). Be specific and use examples to illustrate your points.
What is the role of a public spokesperson? Explain. What strategies must be implemented at local level to enhance communication and eliminate corresponding equipment problems
Discuss two (2) methods that you will employ to create support for your program from internal or external stakeholders. Complete a Needs Analysis for your program. Note: You