Case 1: An ex-employee of a companys payable department was able to steal around $200K by filling fake invoices from his own dummy company. A forensic accounting team discovered that there were 12 fake invoices were submitted and paid by the ex-employee over the time frame of previous 1 year. Payments made of the fake invoices were paid first into account of his wife, after which they were transferred into his own account.

Keeping the Case 1 in view, it can be observed that the organization is lacking behind in structure and quality controls.

Required:

1. Identify the loopholes the organization has in its structure, what controls were missing? (10 marks)

2. What can be done the future to prevent such activity in future? Explain by suggesting what internal controls should be set in place by the organization. (10 marks)