Shortly after Tony got promoted as a store manager at Zip-In, he had an opportunity to fill in at another store where Jones was the store manager. Jones has been a huge ally to Tony, throughout his career development, and he attributes his recent promotion to her guidance. While Jones was on her mandatory 2-week vacation, Tony took care of all her day-to-day operations, including the filing of paperwork. While catching up on some month-end reporting, Tony found that

reconciliations of the weekly money order sales had not been done in 8 months. He also found some errors in the reports that Jones sent to the corporate office right before she left on her vacation. Tony contacted Jones about the errors that he found. Jones said she would take care of the problem when she returned from vacation. Following company fraud reporting procedures, Tony also reported the errors to his supervisor. The supervisor did not seem bothered.

While chatting with staff, Tony learned of two rumours:

1) One, that Jones was using some of the money orders sold in her store to pay her personal

bills, including the rent on her glamorous house.

2) Two, that Jones was using some of the money orders to cover the personal bills of her father, who was recently laid off and could not find work.

Not wanting to further contribute to the gossip, Tony continued his investigation. He discovered that the money orders are pre-numbered and are stored in the vault of the store. Tony performed an audit on the money-order number sequence and found gaps in the sequence. The missing money orders caused the cash register to be short which caused the corporate office to be suspicious, although no

follow-up was done until Tony reported his suspicions while Jones was on vacation.

Tony found the money orders she used to make rent and other credit card payments were cashed by a

regional manager, Joe, at the corporate office. It was determined that Jones was renting a house from

Joe.

1.Identify and discuss the potential fraud type(s) concerned

2.assess the internal controls

1. Identify any weaknesses observed

1. Discuss the implications of each weakness noted

1. Recommend possible internal control activities to strengthen the identified

weaknesses

3.Conclude with any comments you deem value-add