Narrative 15-2
The Alberta Motor Association (AMA)suffered significant losses due to fraud between January 2013 and June 2016. The organization's vice-president of information technology was charged with fraud for allegedly misappropriating as much as $8.2 million. AMA "has reviewed its financial processes and has put in place additional controls to prevent any future incidents of this type." The fraud was discovered when the alleged perpetrator advised AMA that he had hurt his leg,and needed to work more from home;unfortunately,he didn't attend required meetings,which triggered a meeting with the organization's chief operating officer and was placed on disability leave in June 2016.
-Refer to Narrative 15-2. Which traditional management function was AMA NOT using effectively prior to its discovery of fraudulent activities?

Question

Quizplus · Accepted Answer

AMA was not effectively using the control function prior to the discovery of fraudulent activities. This is evident from the fact that the vice-president of information technology was able to misappropriate as much as $8.2 million over a period of three years without being caught. However, after the fraud was discovered, AMA has reviewed its financial processes and put in place additional controls to prevent future incidents.