FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Assume that Brooke Miles, accounts payable clerk for West Coast Design Inc., stole $48,350 by paying fictitious invoices for goods that were never
received. The clerk set up accounts in the names of the fictitious companies and cashed the checks at a local bank. Describe a control procedure that
would have prevented or detected the fraud.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
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
- In the case of The Canny Cashier, name one control that could have revealed signs of the embezzlement.arrow_forwardThe sales of $2,000 made to Shanaya has been posted to the Sara’s account by mistake. It happened because a customer account number was incorrectly entered into the system. Explain what internal control procedure(s) would provide protection against this threat in future?arrow_forwardCarico Ltd, a manufacturer of construction blocks, operates with a fiscal year-end of June 30th, 2021. With a trading history spanning over 25 years, Carico caters to a diverse range of customers, including both large and small hardware stores nationwide. The company's operations encompass a manufacturing plant, five warehouses, and a central head office. Following the manufacturing process, the blocks are stored in one of the warehouses until they are dispatched to customers. It is important to note that Carico currently does not possess an internal audit department. The following is a reflection of the sales system: • • Each customer is assigned a distinct customer account number, which is utilized to input sales orders upon receiving written requests from customers. The responsibility of entering orders lies with an order clerk, and the system performs an automated verification to ensure product availability and prevent the customer from exceeding their credit limit. maintains a New…arrow_forward
- An accounting manager, who has full access to a Company’s accounting system also has access to the bank account and is able to send cash payments without supervision. What is an internal control that should be implemented to reduce the risk of theft or fraud in this company?arrow_forwardWhat are the three different types of Check Fraud.What steps could you take to protect your customer and the bank from check fraud?arrow_forwardProvide an appropriate response based on the following scenarios. Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented? Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented?arrow_forward
- Fraud consists of some deceitful practice or willful device, resorted to with intent to deprive another of his right. Fraud is generally categorized as follows: Financial Statement Fraud a) May include employee theft – typically cash, physical assets (computers), or intellectual property. b) May encompass a variety of wrongful acts, such as, among others, bribes or kickbacks. c) Deliberate misrepresentation of the financial statements.arrow_forward“Identity theft is often applied to a wide range of crimes, including checking account fraud, counterfeiting, forgery, auto theft using false documentation, trafficking in human beings, and terrorism, most policymakers, and researchers agree that identity theft includes the misuse of another individual’s personal information to commit fraud”. Required: Where does identity theft fraud happen often? Explain any five steps that victims should need to take once identity theft occurs.arrow_forwardif a manager is incharge of the Credit Right Software Corp department which involves sells leading account sooftare product and two of his employess commited fraud. How should the manager prepare himself to understand what causes individuals to commit fraud and how it happens?arrow_forward
- Access controls prevent and detect unauthorized and illegal access to the firm's assets. The physical assets at risk in the revenue cycle are inventories and cash. Limiting access to these items would NOT include: A) Locking cash drawers and safes in the cash receipts department B) Making the mail room responsible for opening and recording cash and cheques received from clients C) Warehouse security, such as fences, alarms, and guards D) Using a safe or night deposit box for casharrow_forwardWhile assistant treasurer of Travco Corporation, Frank Mitchell caused two checks, each payable to a fictitious company, to be drawn on Travco’s account with Brown City Savings Bank. In each case, Mitchell indorsed the check in his own name and then cashed it at Citizens Federal Savings & Loan Association of Port Huron. Both checks were cleared through normal banking channels and charged against Travco’s account with Brown City. Travco subsequently discovered the embezzlement, and after Citizens denied its demand for reimbursement, Travco brought a suit against Citizens. Is the indorsement effective? Explain.arrow_forwardWhich of the following is true in the case of forgery? Forgery does not include anything done by typing or word-processing. If a person signs his own check for $100 cash, knowing that there is only $50 in the account, and manages to cash it, the check is a forgery. The "forged instrument" must in some way be false, as in a false signature, a backdating of an existing instrument, or falsely modifying a corporate name. Forgery can be committed only by forging signatures. Alteration of an already existing document does not constitute forgery.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education