Question
In Herris Casino, an employee discovered a flaw in the accounting system. The accounts payable clerk discovered that he was able to change the names
In Herris Casino, an employee discovered a flaw in the accounting system. The accounts payable clerk discovered that he was able to change the names of vendors in the computer system to his name. He would first create false invoices for actual vendors. He next logged into the computer system and changed the name of the vendor to his own. He would then create a check for the false invoice. After the check was printed, he would he change name in the system back to the appropriate vendor. The check register would show only the name of the vendor not who the check was made out to. The fraudulent employee had authorization to sign checks under $1,000. By writing small checks, he was able to defraud the company of $100,000. This fraud was caught by accident. An employee of another department was looking through the vendor list on her computer after the fraudulent employee had changed the vendor name to his name. A few entries later, the vendor name changed again. She wondered how this could occur and asked her supervisor. Soon after, the employee committing the fraud was caught. What type of fraud(s) is/are being committed (Be Specific)? What procedures could have been implemented to prevent this fraud? What procedures could have been used to detect this fraud?
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