Figure 4.1 below presents the payroll procedures of AAA Limited. We discussed various aspects of such payroll procedures. In the light of that discussion, identify the potential frauds possible in the payroll system of AAA Limited. Also, discuss the control techniques to avoid these frauds.

Figure 4.1 below presents the payroll procedures of AAA Limited. We discussed various aspects of such payroll procedures. In the light of that discussion, identify the potential frauds possible in the payroll system of AAA Limited. Also, discuss the control techniques to avoid these frauds.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: What is the purpose of the following control procedures (i.e., what threats is it designed to…

A: Payroll Checking Account:-It is a separate bank account of a business that is only used for payroll…

Q: ecutives would commit fraud and how understanding the motive for fraud can assist an auditor in the…

A: Corporate fraud refers to the illegal and unethical activities undertaken by an individual who is…

Q: Expalin wether the tools used in the financial statement audit are employed in a fraud examination.

A: The tools used in a financial statement audit and a fraud examination share some similarities but…

Q: ff

A: Organization Background: Steinhoff International Holdings N.V is a worldwide retail holding…

Q: below presents the payroll procedures of XYZ Limited. We discussed various aspects of such payroll…

A: Payroll In a simple word payroll means the compensation which are provided by the companies to its…

Q: Briefly explain the key concepts below: a. Financial crime b. Fraud triangle c. Money laundering…

A: Auditing and accounting are closely related fields within the broader realm of finance and financial…

Q: Which of the following IT controls would a company appropriately use to mitigate the risk of…

A: The unauthorized access to the system refers to the interference of the individual or the employee…

Q: Describe a walkthrough of the payroll transaction flow from hiring authorization to payroll…

A: Payroll Cycle: The payroll cycle is commenced with the hiring and dismissal of an employee along…

Q: What is the purpose of the following control procedures (i.e., what threats is it designed to…

A: Control procedures are designed with a view to prevent the frauds and errors from occurring in the…

Q: The following are typical questions that might appear on an internal control questionnaire for…

A: The key Internal control activities are as follows:- Segregation of duties Authorization and…

Q: What is the purpose of the following control procedures (i.e., what threats is it designed to…

A: A payroll register provides the information related to the pay of each employee during each pay…

Q: In determining the effectiveness of an entity’s policies and procedures relating to the occurrence…

A: Management Assertion: Management assertion refers to the claim made by management assuring about…

Q: Answer the following questions: Identify the basic concepts of an accounting information system…

A: Accounting Information System:-it is a system that helps in tracking all accounting information and…

Q: The prim

A: The expenditure cycle begins when a need for goods or services is identified and ends when the…

Q: When a fraud has occurred within an organization, management must decide what follow-up action (s)…

A: An organization usually does not take any legal action against the person who has done fraud as it…

Q: Explain any five internal control activities and describe measures of internal control you would…

A: Control activities are the policies and procedures that help ensure management directives are…

Q: Define fraud examination and describe various engagements performed by fraud examiners.

A: Although the investigation of fraud shares some attributes with forensic, it is not the same…

Q: What are two positive and two negative consequences that this might pose to the company in future…

A: The question is asking about the potential positive and negative consequences that a company might…

Q: List the supporting documents and records the auditorwill examine in a typical payroll audit in…

A: Audit: Audit is the process of verification of the compliance of the financial statements.

Q: Prevention and detection of fraud is the primary responsibility of: a. The Management b. The…

A: Prevention and detection of fraud is necessary to provide financial statement free of material…

Q: The following are typical questions that might appear on an internal control questionnaire for…

A: There are 2 types of substantive audit procedures:- Test of detail Analytical procedures

Q: What was the wells fargo account fraud scandal? What illegal behavior was conducted?

A: The Wells Fargo account fraud scandal refers to a high-profile case involving Wells Fargo, one of…

Q: An effective revenue security system will help you accomplish the following important tasks: a)…

A: Revenue security refers to the procedure by which a company may match the total amount of sales with…

Q: 21) Which is not one of the fraud factors in the Fraud Pentagon? A. Incentive B.…

A: Offshoring,worldwide alliances, and the technology that connects them have all become more important…

Q: Understanding what constitutes fraud and understanding the framework are a part of developing an…

A: The fraud triangle is a model that can be used to explain fraudulent behavior. It involves three…

Q: For the purpose of internal control, the same person who prepares payroll checks should also…

A: The segregation of duties is a fundamental principle in internal control, and it is designed to…

Q: Evaluate the difficulties associated with preventing and detecting payroll fraud.

A: Payroll is the compensation that a firm must pay to its employees on a given day and for a specific…

Q: Who are the professional organizations who are in charge of fraud auditing? Birefly elucidates.

A: This question explains about the professional organization of fraud auditing

Q: ounting information systems aid in the prevention of fraud? Do legislative activities such as the…

A: The accounting information system (AIS) is a programme that gathers data, processes it, and…

Q: Apart from the internal audit and whistleblowing functions, what other mechanisms can assist…

A: There are various methods to tackle fraud. Listed below are explained as under- 1. Background…

Q: Write a short note on "Accounting Frauds"

A: Accounting fraud is the deliberate manipulation of financial accounts to provide the impression that…

Q: Which of the following is designed specifically to detect fraud? 1. A surprise visit to the client's…

A: Fraud refers to an act that has been committed with the intention of misleading others and thus…

Q: In an audit of cash receipts, fraud detection is often a primary focus. It's up to the auditor to…

A: In this audit, the auditor focuses on cash since it is the most liquid asset of the organization.…

Q: Advise the college on the weakness in its systems and procedures due to payroll fraud.

A: List of some actions to be taken by college on the weakness in its systems and procedures due to…

Q: Define the following and give 1 actual case as an example for each type of fraid and methods of…

A: Fraud is a type of malpractice which is done intentionally to harm the third party involved. Step 2…

Q: Outline two positive and two negative consequences that this might pose to the company in future…

A: The question is asking to outline two positive and two negative consequences that a company might…

Q: Internal controls are crucial to ensuring that financial transactions are authorized and company…

A: Internal controls are the policies, procedures, and mechanisms implemented by an organization to…

Q: What is the purpose of the following control procedures (i.e., what threats is it designed to…

A: CONTROL PROCEDURES ARE THE SPECIFIC ACTIONS THAT MANAGEMENT TAKES TO MAINTAIN CONTROL AND TO ENSURE…

Question

Payroll
Department
Empioyee
Supervisor
Time
Time
Card
Time
Card
Card
Supervisor Approves
and Signs Time Cards
Prepare
Paychecks
Paycheck
Paycheck
Paycheck
Supervisor Distributes
Paychecks to Employees

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Outline the steps which can be taken to investigate occupational fraud.
Which of the following is not included in a vulnerability chart? a. Internal controls that a company plans to institute in the future. b. Breakdowns in key internal controls that may have created fraud opportunities. c. Theft investigation methods d. Explanations of the fraud triangle in relation to suspects of fraud.
Answer the following questions to ponder: 1. What is the purpose of internal controls? 2. What will happen if companies do not impose internal controls? 3. Think of possible controls over cash, receivables and inventories. Explain.
4. Zion Associates, a start-up Boston-based engineering company, just hired you as payroll accountant. What are some of the payroll internal controls you would implement to ensure that Zion’s payroll system is fraud and theft free? Name three internal controls mechanisms: a. b. c.
What are solutions a company can take to protect itself against any employees committing fraud through the payroll system?
Identify important internal control activities present in a properly designed system to mitigate the risk of material misstatements for each relevant assertion related to cash and to help prevent or detect employee fraud.
Explain the role of the Risk Manager in fraud detection Explain the role of the Risk Manager in fraud detection
All frauds involve key elements. Identify and describe using examples, the elements involve in an embezzlement fraud.
Explain the risk management and internal control of Fraud Scandal about Wiredcard AG
Internal control is said to be the backbone of all businesses. Which of the following is the bestdescription of internal controls?A. Internal controls ensure that the financial statements published are correct.B. The only role of internal controls is to protect customer data.C. Internal controls and company policies are important to protect and safeguard assets and to protect allcompany data and are designed to protect the company from fraud.D. Internal controls are designed to keep employees from committing fraud against the company.
Explain the impact of the fraud in business according to accounting information system.
An audit client has engaged a third-party service organization tohost its payroll software package on servers located at the service organization. What optionsdo you have to obtain assurance about the controls embedded in the payroll application?