alysar2005
Apr 5, 2009, 10:26 AM
Tow employees of the western printing co. ltd have a number of years been committing frauds witch have remained undetected.
1. George smith is responsible for checking deliveries of raw materials for quantity and quality against copy purchase orders prepared by the purchasing department .in collusion with a supplier's delivery driver he has consistently accepted short deliveries but signed a receipt for the quantity of goods ordered. The delivery driver has subsequently sold the goods delivered short and shared the proceeds with George smith.
2. John brown the chief purchasing officer has had an arrangement with a stationery supplier that they will pay directly to him a commission on all orders placed by the company. He has sole responsibility for choosing suppliers and has ensured that all stationery orders have been given to this supplier.
List internal controls which could have been employed to minimise the possibility of each of these frauds taking place. You should give the reason for the control in each case.
1. George smith is responsible for checking deliveries of raw materials for quantity and quality against copy purchase orders prepared by the purchasing department .in collusion with a supplier's delivery driver he has consistently accepted short deliveries but signed a receipt for the quantity of goods ordered. The delivery driver has subsequently sold the goods delivered short and shared the proceeds with George smith.
2. John brown the chief purchasing officer has had an arrangement with a stationery supplier that they will pay directly to him a commission on all orders placed by the company. He has sole responsibility for choosing suppliers and has ensured that all stationery orders have been given to this supplier.
List internal controls which could have been employed to minimise the possibility of each of these frauds taking place. You should give the reason for the control in each case.