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Brett Starr has worked for the past six years as a payroll clerk for Montana Industries, a small lighting manufacturing firm in Wyoming. Brett's family
Brett Starr has worked for the past six years as a payroll clerk for Montana Industries, a small lighting manufacturing firm in Wyoming. Brett's family recently experienced unfortunate circumstances. His newborn daughter, Bretta, required major heart surgery and the medical bills not covered by insurance have financially strained his family.
Brett is a hard worker and a stellar employee. Although he received regular performance raises during his first few years at the company, his wages have not increased in the past two years. Brett recently asked his supervisor, Fred Finger, for a raise. While Fred agreed that Brett deserved a raise, he told Brett that he could not currently approve of one because of the major decrease in sales during the Covid crisis.
Brett continued his accounting duties and the financial pressures in his life continued. When salesperson Lola SmithLampy quit suddenly over a dispute with management, Brett came up with a plan. Since he processed employee terminations, time card approval, and paycheck distribution, he decided to delay Ms SmithLampy's termination paperwork. He forged her weekly time cards with his signature and then cashed her checks, keeping the money. Since he distributes the paychecks every two weeks, he thought no one would find out anyway. In fact, no one ever discovered his scheme and Brett continued the practice for two full years, earning Brett an extra $
Use the fraud triangle from Chapter Exhibit to identify the three elements of the fraud triangle and to explain how Brett successfully uses each of these elements to "earn" extra money. Write two to three sentences to explain each fraud element and Brett's usage.
List three internal controls could have been put in place to prevent Brett's paycheck scheme in the first place?
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