Paper Week 3 - Greater Providence Deposit & Trust Greater...

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Michelle N. Knight Strayer University Instructor: Thomas “Jason” Wood Accounting Information Systems – October 20, 2010
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In this case, The Greater Providence Deposit & Trust might improve its control procedures over the disbursement of its loan funds by monitoring the amount of loans that are written by their employees. Once a handful of loans are approved by a manager or another employee for a certain period of time, those loans should be audited by an external auditor. By implementing this system, I believe that it will make it a lot easier for auditors to detect fraudulent activities. Another way the bank can improve their controls is to not allow the loan writer to cash the checks for any loans. In cases such as this, the bank should segregate duties. This case indicates a lack of proper segregation of duties, because it gave too much responsibility and power to the bank manager. This passage states that James Guisti had a lending limit of $10,000, and some of his loans exceeded that amount. Fraud detection software should be installed to detect indications of fraud. For example, Guisti submitted a loan that was slightly over his limit, and that loan went through. At a later date, Guisti submitted loans that were slightly higher and higher over a period of time. Guisti’s lending limit was increased to $15,000 and later $25,000. Fraud detection software could have detected the excessive amount of loans and that the loans were over his allowed limit. Some of the loans Guisti took out were taken out with a fictitious name, therefore the name
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This note was uploaded on 02/03/2012 for the course ACC564 ACC564 taught by Professor Smith during the Spring '11 term at Strayer.

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Paper Week 3 - Greater Providence Deposit & Trust Greater...

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