You were asked to investigate extremely high, unexplained merchandise shortages at a department store chain. Classify each of the five situations as a fraudulent act, an indicator of fraud, weakness in internal control or unrelated to investigation. (Adapted from the CIA Examination)

The receiving department supervisor owns and operates a boutique carrying many of the same labels as the chain store. The general manager is unaware of the ownership interest.	Answer 1Choose...indication of possible fraud/weakness in internal controlindication of possible frauda fraudulent actunrelated to investigation
The receiving supervisor signs receiving reports showing that the total quantity shipped by a supplier was received and then diverts 5% to 10% of each shipment to the boutique.	Answer 2Choose...indication of possible fraud/weakness in internal controlindication of possible frauda fraudulent actunrelated to investigation
The store is unaware of the short shipments because the receiving report accompanying the merchandise to the sales areas shows that everything was received.	Answer 3Choose...indication of possible fraud/weakness in internal controlindication of possible frauda fraudulent actunrelated to investigation
Accounts Payable paid vendors for the total quantity shown on the receiving report.	Answer 4Choose...indication of possible fraud/weakness in internal controlindication of possible frauda fraudulent actunrelated to investigation
Based on the receiving department supervisors instructions, quantities on the receiving reports were not counted by sales personnel.	Answer 5Choose...indication of possible fraud/weakness in internal controlindication of possible frauda fraudulent actunrelated to investigation