a new firm to conduct HCG’s market research. However, Sarah never
informed the accounting department that the Cambridge and Company
account had been closed. Because her supervisor allowed Sarah to sign
the payment voucher for services rendered, Sarah was able to continue
to process checks made payable to Cambridge’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 Sarah would take
responsibility for distributing the payments. Sarah opened a bank
account in a nearby city under the name of Cambridge and Company,
where she would make the deposit. She paid all of her personal
expenses out of this account.
Assume that you have been hired by Hawks Consulting Group to help
detect and prevent fraud.
What internal controls are missing in Sarah’s company?
What opportunities gave Sarah the opportunity to perpetrate the
fraud?
How could this fraud have been detected?
AC 465 Unit 3 Assignment Exercises
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