Internal Controls and Fictitious Invoices
- Topics:
- Audits,
- Revenue recognition
- Tags:
- AICPA,
- Operational Accounting,
- Litigation,
- Invoice,
- Investment,
- Internal Control,
- Finance,
- Business Operations,
- Bond,
- Payment
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Overview: This case study is related to the frauds in accounts payables and mismanagement of payments in organization books. It is stated in the case that a senior accountant finds evidence of poor internal controls and, ultimately, fraud, at a family of not-for-profits. In order to solve all of the problems with the organization's books, he ends up joining the staff. Several of the fictitious invoices were submitted for payment through the county bond that was being managed by Seventh Street Bank. One invoice said that it was for the purchase of a new generator for $80,000. However, staff member dealing with this issue never recorded the new generator as a fixed asset. Instead, the record is for the $80,000 expenditure and the receipt of the bond money to the same expense account in the same month. Many of the fictitious invoices for immediate payments were made, to solve the issue a meeting was conducted, and the procedure of the same is explained in the study.
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Format: HTML | Date: Jan 2003 | Pages: 1
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