You are auditing petty cash and discover that a friend of yours, who is in charge of the petty cash funds, has forged some petty cash vouchers amounting to $100 over the last five months. He ‘explains’? that he was just short of cash a few times and did not think that the small amount withdrawn would be a problem, since he intended to repay it by year-end. He pleads with you not to report him, assuring you that he will stop the practice and reimburse the fund on the very next payday.

Required:

How should you proceed? Explain the rationale for your response.