John Dlamini tasked the senior internal auditors to perform a process audit on the printing

department of Extra Ltd$.$

The following information was obtained:

$$ Joy Long was recently appointed as the new manager in the printing department. Joy is

related to the chief executive officer $($CEO$).$ Because the CEO trusts her fully, he gave

her full access to all the systems within Extra Ltd$.$

$$ Study materials are forwarded to the printing department as pdf documents and are

password protected. Joy recently requested that all passwords on documents be

removed before sending the documents to her.

$$ The policies and procedure manual were reviewed, and it was noted that the policies

and procedures were outdated.

$$ Joy explained to the senior internal auditor that because she is family of the CEO, she

can do whatever she wants. She also believes that the company policies and

procedures are not applicable to her.

$$ Three employees in the printing department resigned since the appointment of Joy

Long. The employees felt threatened by her and did not agree with her management

style as Joy believed in manging through fear, shouting and fighting.

$$ After discussions with an employee in the printing department, you obtained the

following additional information:

AUI$2601/2/2024$

$9$

$$ The employee noticed that Joy sends out the pdf documents to customers from

her personal email address, which is against company policy.

$$ Certain documents forwarded to Joy were never received by the printing

department. When the documents were requested from Joy she explained that

she is too busy and will forward the documents when she has time.

$$ The employee suspects that Joy is selling the electronic pdf copies to some of

the students at a lower price than the printed copy.

$$ Everyone in the office suspects that Joy has a gambling problem and needs the

extra cash to fund her gambling addiction.

REQUIRED MARKS

$6\mathrm{.}1$ With reference to the information given in the scenario, list the three common

characteristics of fraud and provide an example from the scenario for each

characteristic.

$(6)$

$6\mathrm{.}2$ Identify six $(6)$ warning signals that can be observed from the information in

the question which could indicate the possible existence of fraud.

$(6)$

$6\mathrm{.}3$ Describe the internal auditor$$s responsibilities during fraud investigations