A first-line supervisor of a construction company is responsible for a crew comprised of many construction workers. The work is hard, and the employee turnover rate is high with workers often leaving without notice. Throughout the work week these employees record their attendance on separate time cards, which the supervisor approves and then submits to the payroll department at the end of the week. Based on the time cards, the payroll department prepares the paychecks and sends them to the supervisor, who then distributes the checks to each person in the work crew.

1. Identify and explain the segregation of duties deficiencies in the business scenario described above.

2. What fraud might result from the gaps in internal control apparent in this business scenario?