Case Joe Bern, the cash disbursements clerk of Red Company, has full authority in paying invoices and issuing checks. He is also responsible about performing the end of month bank reconciliation. He writes a check for himself in the amount of an invoice, and then cancels the check originally written to pay for the invoice. He cashes the check for himself. After few weeks, he writes a second check and records it in the cash disbursements journal and then deposits the check. He then files it with all other paid invoices. Joe has been following this practice successfully for several years and feels confident that he has developed a foolproof method to earn some extra income. Choose the correct answer: