The assistant finance director for the city of Tustin, California, was fired after city officials discovered that she had used her access to city computers to cancel her daughter's $300 water bill.An investigation revealed that she had embezzled a large sum of money from Tustin in this manner over a long period.She was able to conceal the embezzlement for so long because the amount embezzled always fell within a 2% error factor used by the city's internal auditors.

AUDIT APPROACH: What weaknesses existed in the audit approach?How could the audit plan be improved?

INTERNAL CONTROLS: What internal control weaknesses were present in the system?

Should Tustin's internal auditors have discovered this fraud earlier?Why or why not?