Northwest Company’s Auditor Mr. Jason finds out $ 5 more in his payroll withholdings. He ignored $5 withholding as a small amount. Later on, other employees also complained of the error. Mr. John investigated and audited employee’s accounts and finds out that all employees are having $5 discrepancies. He also finds out that the payroll manager’s (Mr. Don) paycheck deduction and withholdings are having huge differences. The auditor complained the mismatch to the Management and to the payroll manager. The payroll manager on this discrepancy said it is a small issue and the withholding is required as per Tax Law.

17. What is the cause of fraud in the company? Who perpetrated fraud?

18. Give suggestions to avoid payroll related fraud in companies.