Of the following examples of fraud,which will be the most difficult to prevent and detect? Assume the company enforces adequate segregation of duties.
A)A mail room employee steals a check received from a customer and destroys the documentation.
B)The accounts receivable clerk does not record sales invoices for friends or family,so they can receive free goods.
C)An employee puts inventory behind the dumpster while unloading a vendor's delivery truck,then picks up the inventory later in the day and puts it in her car.
D)A credit manager issues credit cards to himself and a staff accountant in the accounting office,and when the credit card balances are just under $1,000,the staff accountant writes off the accounts as bad debt.The credit manager then issues new cards.

Question

Quizplus · Accepted Answer

The fraud in choice D involves collusion between two employees, making it more difficult to detect than fraud committed by a single person. Additionally, the amounts written off as bad debt are likely to be relatively small, making it more difficult to identify the fraud through analysis of financial records. Adequate segregation of duties can help prevent this type of fraud, but detection may require more proactive measures such as monitoring of credit card usage or rotation of job responsibilities.

Of the Following Examples of Fraud,which Will Be the Most