Internal Controls An employee of JHT Co., a private trucking company, was responsible for resolving...
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Internal Controls An employee of JHT Co., a private trucking company, was responsible for resolving roadway accident claims under $25,000. The employee created fake accident claims and wrote settlement checks between $5,000 and $25,000 to friends or acquaintances acting as phony "victims." One friend recruited subordinates at his place of business to cash some of the checks. In addition, the JHT employee also recruited lawyers, who he paid to represent both the trucking company and the fake victims in the bogus accident settlements. When the lawyers cashed the checks, they allegedly split the money with the corrupt JHT employee. This fraud went undetected for two years. Please answer the following questions: 1. What weaknesses in internal control contributed to this fraud? 2. Why would it take so long to discover such a fraud? 3. What control procedures should be changed to prevent such a fraud
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