Reference no: EM132874235

Question - Timber Solution Ltd., a communications equipment manufacturer, recently fell victim to a fraud scheme developed by one of its employees. To understand the scheme, it is necessary to review Timber Solution's procedures for the purchase of services. The purchasing assistant is responsible for ordering services (such as repairs to a photocopy machine or office cleaning) after receiving a service requisition from an authorised manager. However, because no tangible goods are delivered, a receiving report is not prepared. When the Accounting Department receives an invoice billing Timber Solution for a service call, the accounts payable assistant calls the manager who requested the service to verify that it was performed. On several occasions, Johnson would submit a requisition for services to be provided by Bamber Services. However, the service requested was not needed, and it was never performed. Bamber Services would bill Timber Solution for the service and then split the cash payment with Johnson.

Explain what changes should be made to Timber Solution's procedures for ordering and paying for services to prevent such occurrences in the future.