FORENSIC ACCOUNTING:

Helen Weeks has worked for Bonne Consulting Group (BCG) as the executive secretary in the administrative department for nearly 10 years. Her apparent integrity and dedication to her work has quickly earned her a reputation as an outstanding employee and has resulted in increased responsibilities. Her present responsibilities include making arrangements for out-side feasibility studies, maintaining client files, working with outside marketing consultants, initiating the pay-ment process, and notifying the accounting department of all openings or closings of vendor accounts.

During Helen's first five years of employment, BCG subcontracted all of its feasibility and marketing studies through Jackson & Co. This relationship was subse-quently terminated because Jackson & Co. merged with a larger, more expensive consulting group. At the time of termination, Helen and her supervisor were forced to select a new firm to conduct BCG's market research. However, Helen never informed the accounting depart-ment that the Jackson & Co. account had been closed.

Since her supervisor allowed Helen to sign the pay-ment voucher for services rendered, Helen was able to continue to process checks made payable to Jackson's account. Because her supervisor completely trusted her, he allowed her to sign for all voucher payments less than $10,000. The accounting department continued to process the payments, and Helen would take respon-sibility for distributing the payments. Helen opened a bank account in a nearby city under the name of Jackson & Co., where she would make the deposit. She paid all of her personal expenses out of this account.

Assume that you have recently been hired by BCG to help detect and prevent fraud.

1. What internal control activities are missing in Helen's company?

2. What gave Helen the opportunity to perpetrate the fraud?

3. How could this fraud have been detected?