FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Richard has been a highly regarded employee of the Brier Corporation for almost 20 years. Her loyalty to the company is reflected in her dedication to her job as a general accounting clerk, from which she has not taken a vacation in almost 12 years. Because of her dedication and long tenure, she has acquired many related responsibilities, which have allowed Brier Corporation to reduce its workforce through attrition, control salary expenses and become more efficient and competitive. The following describes Richard's responsibilities.
Richard receives copies of credit sales orders from the sales department. She accesses the
Required:
1.Based on the control problems identified above, what sorts of fraud are possible in this system?
2.What controls are needed to reduce the risk of fraud?
Expert Solution
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Step 1: Introduction:
Accounting fraud is the deliberate manipulation of financial records to provide the impression that a company is financially sound. Additionally, it entails deceiving shareholders and investors on behalf of the company, a worker, or even an accountant. By inflating revenue, leaving out expenses, and submitting false information for assets and liabilities, a company might fake its financial records.
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