Discussion Topic:

An employee for the city of Chicago, Illinois was fired after city officials discovered that he had used his access to city computers to cancel his $300 water bill.An investigation revealed that he had been doing this for a long period of time thereby embezzling a large amount of money from the city of Chicago.He was able to conceal the embezzlement for so long because the amount embezzled always fell within a 2% error factor used by the auditors.

What weaknesses existed in the audit approach?How could the audit plan be improved?What internal control weaknesses were present in the system?Should the auditors have discovered this fraud earlier?