MERNA company develops, manufactures, and sells computer hardware. The firm outsources manufacturing of many of its computer components. During December 2021 the CEO of MERNA firm takes 20 days vacation to Cyprus and signs several checks in order to pay major obligations when he is absent. Mayar Abderazeq, accountant in the company, uses this opportunity to her advantage. Mayar writes a check to herself for the amount of a large suppliers invoice. The company does not maintain acquisitions journal, therefore, Mayar records the amount in the cash payment journal as an acquisition from the vender listed on the invoice. She holds the check until many weeks into the next period in order to be sure that the external auditor will not get the chance to investigate the electronic copy of the canceled checks. At the beginning of the subsequent year when the CEO comes back from his vacation, Mayar sends the invoices payment and again records the checks in the cash payment journal. Then, she marks the invoices as paid and documents it with other paid invoices.

Discuss and provide your opinion of the following:

1. Discuss external auditors responsibility for detecting this type of fraud.
2. Discuss the weaknesses in MERNA companys internal control system.
3. Explain the types of evidence the external auditor may use to discover this embezzlement.