It is important that companies assess their risks of workplace fraud. Managers must also possess the skills to identify workplace fraud and the skills to establish internal controls to effectively reduce the risks of such fraud.

Required:

For each of the following five separate cases, identify which of the three major types of workplace fraud is likely to occur. Recommend internal controls that are effective in reducing the likelihood that such fraud occurs.
1. As part of her computer programming duties, Brandi Marks adds new suppliers to her company’s accounts payable system. Brandi also manages accounts payable and signs checks payable to suppliers.
Brandi recently added several new suppliers to the accounts payable system.
2. Pefia Company has its employees write down their hours worked in a manual ledger. One employee consistently claims more unscheduled overtime hours than any other employee.
3. Gibson Company pays its accountant a bonus based on its financial performance. The accountant understated the company’s expensés in its most recent income statement.
4. An employee refuses to buy goods from a potential supplier unless that supplier hires the employee’s wife.
5 Ace Electronics is a major wholesaler of electronic equipment. The company’s inventory manager is responsible for ordering inventory and paying suppliers. Recently, warehouse employees reported several large shipments of cell phones missing.