HW chapter 3

HW chapter 3 - been cashed and no credit had gone to their...

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October 26, 2006 Accounting 300 Chapter 3 homework problems Problem 1. This fraud is a management conflict of interests fraud. It is difficult to detect because managers are above internal control mechanisms. Another person could be needed to sign off on the orders, and check the prices before the order is placed. This segregation of duties can help to detect and prevent fraud. It would prevent fraud because the opportunity would not be available. Problem 2. The contractor is under economic stress, which encourages fraud. Transaction authorization should be used to control and monitor payments. Problem 3. a. At the end of the month, customers would be wondering why their check had
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Unformatted text preview: been cashed and no credit had gone to their account at Benson and Abernathy. b. They could hire additional supervisors which would mean that there was more supervision of the goings on. It would be harder to steal checks Problem 6. The segregation of duties of the toll collectors would help to deter fraud. If these two collectors were working together, it would be better if other people were working with them. Some sort of random audit of the toll collectors may help too. This may catch the toll collectors, or at least scare them into not committing the fraud for fear of getting caught....
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