You are the senior auditor at KGS & Co and are planning the audit of Core Pty Ltd (Core) for the year ended 30 June 2022. Core is a manufacturer of computer components and your audit manager has provided you with the following note after meeting with the finance manager of Core:

- In January 2022, it was discovered that a significant fraud had been carried out by four members of the sales department who had colluded. They had stolen funds from wholesale customer receipts and then to cover this, they allocated later customer receipts against the older receivables. These employees were all reported to the police and were subsequently dismissed.

Required:

1) What could have prevented this fraud? (2 Marks)

2) What procedures could have alerted the auditor to the fraud? (4 Marks)

3) List one appropriate major Balance Sheet account and key audit assertion. (2 Marks)