Exercise 7-5 Use of Accounting Records in Internal Control Careful scrutiny of accounting records and financial statements can lead to the discovery of fraud or embezzlement. Each of the situations that folow may indicate a break down i internal control. Indicate the nature of the possible fraud or embezzlement in each of these situations. 1. Wages expense for a branch office was 15 percent higher in 2014 than in 2013, even though the office only 2.5 percent in 2014 was authorized to employ only the same four employees and raises wes The input in the box below will not be graded, but may be reviewed and considered by your instructor 2. Sales returns and allowances increased from 2.5 percent to 10 percent of sales in the first two months of 2014, after record sales in 2013 resulted in large bonuses for the sales staff The input in the box below will not be graded, but may be reviewed and considered by your instructor 3. Gross margin decreased from 20 percent of net sales in 2013 to 10 percent in 2014, even though there was no change l prking. Endi g inventory was 25 percent let t the end of 2014 than it was at the begining of the vear. There is no immedate explinon for the decresse in liventary. The input in the box below will not be graded, but may be reviewed and considered by your instructor 4. A review of daily records of cash register recelipts shows that one cashier consisten The input in the box below will not be graded, but may be reviewed and considered by your instructor. tly accepts more discount coupons for purchases than do the other cashiers