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Fraud Examination: Developing an Appropriate System of Controls

Required

Provide an example of how a fraud could be perpetrated in one of the following types of fraud:
• Billing
• Check tampering
• Payroll schemes

And 1) design an internal control to prevent it and 2) assuming it escaped detection by existing
Internal controls, how might you detect it after it's happened?

Solution Preview

Fraud Examination

Required

Provide an example of how a fraud could be perpetrated in one of the following types of fraud:
• Billing
• Check tampering
• Payroll schemes

And 1) design an internal control to prevent it and 2) assuming it escaped detection by existing
internal controls, how might you detect it after it's happened

The most common fraud based on an employee misappropriation of cash is as follows: check tampering, revenue skimming, fraudulent disbursements by fake invoicing, payroll schemes and billing scams. Let's examine a billing fraud in the form of larceny and embezzlement at the time of billing. In our example, a ...

Solution Summary

The expert develops an appropriate systems of controls for fraud examinations. The escaping detection by existing internal controls are assumed.

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