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Question 2 (10 points) Tom and Mike are long-term friends but kept their friendship a...

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Accounting

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Question 2 (10 points) Tom and Mike are long-term friends but kept their friendship a secret from everyone else. Tom works as a human resources officer while Mike works as a payroderk. Neither feel like they are paid enough for their work. The factory workers fill out paper timesheets which the foreman approves with his initials. The approved time sheets are then compiled into a weekly report by Tom, who always appends three additional fictitious employees, and sends this report to Mike who then distributes the payroll. Pay cheques are sent in the mail to a post office box rented bv Tom. Tom then deposits the cheques in an zscount opened in the names of the fictitious employees. Tom and Mike have been doing this scheme for over 3 years. (2a) Based on the above, briefly explain the two (2) basic types of fraud and identify the fraud type described in the above case. (3 marks) (2b) Referring to the above fraud case, and with reference to the fraud triangle, explain why the fraud was able to occur. (5 marks) (2c) Identify two (2) controls you would implement to address the above fraud scheme and label each control as preventive or detective. (2 marks)

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