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Hi, need to submit a 1000 words essay on the topic Team Assignment.Download file to see previous pages... This person can make extra orders of items he keeps for himself. The current accountant can al
Hi, need to submit a 1000 words essay on the topic Team Assignment.Download file to see previous pages...
This person can make extra orders of items he keeps for himself. The current accountant can alter the shipping invoices to hide his scam. “Employees who have authority to purchase assets and services for the company are in a unique position to take advantage of their authority to enrich themselves or their friend” (Louwers, Ramsay, Sinason, Strawser, 2007). An internal control that would prevent the purchasing manager is by having the controller performed trimester internal audits of the purchasing department. Another internal control that can help minimize the effects of frauds is by requiring the signature of the controller for purchases above $50,000. A third internal control mechanism is to have cameras in the warehouse where the goods are stored after arrival to the store. One of the largest expenses of any organizations is the payroll. Payroll is an important accounting function that must be monitored closely to prevent fraudulent activity. One of the most common payroll frauds is the use of phantom employees. A phantom employee is an employee that does not exist, but who is on the payroll of the company. The corrupt employee in charge of the fraud keeps the money being paid to the phantom employees. On many occasions the unethical employees running such as scam often have many phantom employees on payroll. A way to prevent phantom employees is by auditing the documentation of all the employees on a monthly basis. Another type of scam that can occur is deducting payroll taxes from the employees and failing to pay them to the government. Governments are bureaucratic entities that often lack the resources to properly audit these types of transactions. The controller of the company should cross check the payroll tax deduction with the payments made to the government every three months. The board of directors of a company should establish bylaws that place a cap on the amount of salary and bonuses a CEO is eligible to receive. References Louwers, T., Ramsay, R., Sinason, D., Strawser, J. (2007). Auditing &. Assurance Services: A look beneath the surface. (2nd ed.).