ACC614 Week 3 Discussion 2 Investigating a Fraud

This is a questionable circumstance since there is no documentation to confirm the payments made; therefore, we must evaluate whether they happened and whether the customer logged them. If the payment was made, verify the authorization. Senior managers should pay the payables.

Fraud is willfully misrepresenting facts to cause loss or harm. Auditors may examine controls to see whether cash disbursements are handled correctly (Louwers et al., 2021). If internal control operations are ineffective, auditors must enhance specific audit procedures to guarantee the cash position is not significantly misstated and to uncover suspected cash fraud. The auditor checks bank reconciliations for timeliness (Louwers et al., 2021). The auditor may examine who approved the company’s invoices despite the low monetary amounts. The auditor might verify with whoever submitted the invoice. The auditor may also verify invalid transactions. The auditor might match vendor and paycheck addresses to remove suspicion.

Additionally, we will vouch for the expenditure to the source to verify whether a person with knowledge of the type of expense approves expenses, i.e., the maker and analyzer of payment are different. We would then examine the reliability of the cost by trying to assess whether the firm decided to enter the correct dollar amount, the accurate seller posting was done, and compensation was taken to the correct statement of account.

Louwers, T. J., Bagley, P. L., Blay, A. D., Strawser, J. R., & Thibodeau, J. C. (2021). Auditing & assurance services (8th ed.). McGraw Hill.