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Sarah Johnson was a trusted employee of Evergreen Trust Bank. She was involved in everything. She worked as a teller, she accounted for the cash

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Sarah Johnson was a trusted employee of Evergreen Trust Bank. She was involved in everything. She worked as a teller, she accounted for the cash at the other teller windows, and she recorded many of the transactions in the accounting records. She was so loyal that she never would take a day off, even when she was really too sick to work. She routinely worked late to see that all the day's work was posted into the accounting records. She would never take even a day's vacation because they might need her at the bank. Adam and Jammie, CPAs, were hired to perform an audit, the first complete audit that had been done in several years. Johnson seemed somewhat upset by the upcoming audit. She said that everything had been properly accounted for and that the audit was a needless expense. When Adam and Jammie examined some of the bank's internal control procedures, it discovered problems. In fact, as the audit progressed, it became apparent that a large amount of cash was missing. Numerous adjustments had been made to customer accounts with credit memorandums, and many of the transactions had been posted several days late. In addition, there were numerous cash payments for "office expenses." When the audit was complete, it was determined that more than $100,000 of funds was missing or improperly accounted for. All fingers pointed to Johnson. The bank's president, who was a close friend of Johnson, was bewildered. How could this type of thing happen at this bank? Required Prepare a written memo to the bank president, outlining the procedures that should be followed to prevent this type of problem in the future. 1. ATC 4-4 p. 160 In your response include the Internal Control Procedures that would have detected or prevented this type of fraud. Refer to p. 148 of you text

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