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Helen Weeks has worked for Bonne Consulting Group (BCG) as the executive secretary in the administrative department for nearly 10 years. Her apparent integrity and dedication to her work has quickly earned her a reputation as an outstanding employee and has resulted in increased responsibilities. Her present responsibilities include making arrangements for outside feasibility studies, maintaining client files, working with outside marketing consultants, initiating the payment process, and notifying the accounting department of all openings or closings of vendor accounts.

During Helen’s first five years of employment, BCG subcontracted all of its feasibility and marketing studies through Jackson & Co. This relationship was subsequently terminated because Jackson & Co. merged with a larger, more expensive consulting group. At the time of termination, Helen and her supervisor were forced to select a new firm to conduct BCG’s market research. However, Helen never informed the accounting department that the Jackson & Co. account had been closed.

Since her supervisor allowed Helen to sign the payment voucher for services rendered, Helen was able to continue to process checks made payable to Jackson’s account. Because her supervisor completely trusted her, he allowed her to sign for all voucher payments less than $10,000. The accounting department continued to process the payments, and Helen would take responsibility for distributing the payments. Helen opened a bank account in a nearby city under the name of Jackson & Co., where she would make the deposit. She paid all of her personal expenses out of this account.

Assume that you have recently been hired by Bonne Consulting Group to help detect and prevent fraud.
1. What internal controls are missing in Helen’s company?
2. What gave Helen the opportunity to perpetrate the fraud?
3. How could this fraud have been detected?

Respuesta :

Answer:

1.)  The internal controls which were missing are from the separation of responsibilities. There must have been in place an inner regulator were an individual works with advisers while alternative individual or unit take-care of the expense procedure, then somebody else allow expenses and then office should distribute the expenditures. There is an absence of inner controls as you can realize that the corporation amalgamated with a larger corporation and no one measured other accounts such as Jackson and company any longer.

2.)  With the lack of control, this offered Helen the chance to effect the fraud. With this presence said, she was talented to emulate sign receipts and spend the retailer’s expenditures. She were also the one in responsibility of office the initial and final of accounts. In short, she had several accountabilities that should have remained separated up better and had diverse individuals for the separations of the job. In addition, she needed a bank description from the corporation where she was capable to put the expenditures and pay individual expenditures.

3.)  The method this fraud might be noticed is the inspection squad can ask the bank for reports. They might also conference sellers. The accounting section should have ended sure they were doing the due diligence in dealers and corresponding the receipts with statements and expenditures.

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