Internal controls All-Around Sound Co. discovered a fraud whereby one of its front...
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Internal controls AllAround Sound Co discovered a fraud whereby one of its front office administrative employees used company funds to purchase goods, such as computers, digital cameras, and other electronic items for her own use. The fraud was discovered when employees noticed an increase in delivery frequency from vendors and the use of unusual vendors. After some investigation, it was discovered that the employee would alter the description or change the quantity on an invoice in order to explain the cost on the bill. Answer the following True or False questions about the company's internal controls. These will assist you in determining the weaknesses. Purchases should be initiated by a requisition document. An accounts payable clerk should match the requisition, purchase order, and invoice before any payment is made. The invoice should have been delivered directly to the accounts payable clerk to avoid corrupting the document.
Internal controls
AllAround Sound Co discovered a fraud whereby one of its front office administrative employees used company funds to purchase goods, such as computers, digital cameras, and other electronic items for her own use. The fraud was discovered when employees noticed an increase in delivery frequency from vendors and the use of unusual vendors. After some investigation, it was discovered that the employee would alter the description or change the quantity on an invoice in order to explain the cost on the bill.
Answer the following True or False questions about the company's internal controls. These will assist you in determining the weaknesses.
Purchases should be initiated by a requisition document.
An accounts payable clerk should match the requisition, purchase order, and invoice before any payment is made.
The invoice should have been delivered directly to the accounts payable clerk to avoid corrupting the document.
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