The impact of employee and management fraud is staggering both in terms of dollar costs and effect on the victims. Presented below is an independent case of employee wrongdoing:
While performing an audit of cash disbursements in a manufacturing firm, internal auditors discovered a fraud perpetrated by an accounts payable clerk. The clerk had made copies of supporting documents and used the copies to support duplicate payments to a vendor of materials used in the manufacturing process. The clerk, who had opened a bank account in a name similar to that of the vendor, took the duplicate checks and deposited them in the bank account.
Describe the recommendation that the internal auditors should make to prevent similar problems in the future.