Raymond Chow was an entrepreneur who built up a successful construction company. His wife, Sheila, per- formed all of the accounting functions for the company until she became ill and Raymond hired Claudia Chen as his full-time accountant. She opened the mail, made bank deposits, signed cheques, reconciled bank accounts, and authorized electronic funds transfers. She also prepared invoices to customers and recorded all of the company's journal entries in a computerized software program that she had on her laptop. After working for the company for six months, Claudia failed to show up at work. Upon further investigation, Raymond found that Claudia had stripped all of the cash out of the com- pany. He was forced to declare bankruptcy.

Instructions

Write a letter to Raymond explaining how weaknesses in control activities over cash allowed the bankruptcy to occur. Suggest possible techniques that Claudia used to defraud the company.