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Why does a person add fictitious employees to payroll?

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The auditors of Annaly mortgage discovered that a lot of fictitious employees were on the payroll system and were being paid salaries. Neither the CFO nor the payroll manager was aware of the fraud. What could be the possible reasons for the fictitious employees being added on the payroll system? Suggest one reason.

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One paragraph in everyday language suitable for novices.

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Why add fake people to the payroll? Whoever submitted the fake paperwork to "hire" someone that doesn't exist, is hoping to pocket the wages or the ...

Solution provided by:
Carol Sargent, PhD
Education
  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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