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29. (TCOs E and F) Sarbanes Oxley requires that per Section 404 that internal controls within a publicly held company are to be reviewed, evaluated, and tested at year end to ensure that adequate controls are in place. In addition to understanding the internal controls present within your client’s company, the auditor must also evaluate whether these controls are in place and implemented. How does an auditor evaluate these controls to see that they are working and in place?30. (TCOs E and F) Describe the six related audit transaction objectives and indicate whether they pertainsolely to Sarbanes Oxley or nonpublicly traded companies. 31. (TCOs E and F) A Remington School District employee has been charged with theft and forgery for allegedly stealing approximately $72,000 in district funds.Mary Blaner, 51, was charged in District Court with one count of second-degree felony theft and five counts of third-degree felony forgery. She is the second school district employee to be formally charged with stealing from the district. Both individuals were charged in separate and apparently unrelated cases.Blaner, who was the district's payroll clerk, allegedly arranged electronic direct deposits of funds for nonexistent employees that then went to her, according to the police. Blaner was a trusted employee
who had worked at the district for over 10 years. (Note: She just went through a divorce and has four children to support. She needs money for her children and a new car and had plans to pay the money back later.)"Over the course of the last 15 months, she was able to allegedly siphon funds out of their (the district's)account into her account, and she allegedly set up fictitious employees." School district officials became suspicious when they had trouble balancing the district's account. After an internal audit, school officials came across payroll listings for workers who did not have any matching Social Security numbers. Anotherschool district employee, Cindy Heap, who formerly worked as an elementary school secretary, earlier was charged with theft and 11 counts of forgery in a different case, according to Gary Searle, deputy county attorney. Heap allegedly took just under $90,000 in district funds, Searle said. Heap, 32, resigned from her job.(1) What factors allowed these frauds to occur?(2) What do you think the school district should do in the future to prevent fraud from occurring in the future?(3) What responsibility do you feel the current school external auditor has to detect this fraud?(4) How have the three elements of the Fraud Triangle enabled Mary to commit this fraud?A. Answers include the following.