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ACC00718 - Accounting Information Systems and Processes Assignment - Southern Cross University, Australia

Section A - (1) Identifying the five (5) procedures and checks that would have reduced the risk to the victim company.

Answer - In relation to the case study that has been provided it can be stated that understanding the risks and minor errors in workplace can lead up to great loss and hinder any organization to successfully attain their objectives. The case reflected the overpayment of a lot of money from a private company to a promotional organization due to some minor mistakes in inflating the number of responses from the purchasers and prospective customers. It is very interesting to note that such cases are resulting in monetary loss for the company and fosters the importance of risk management and controlling of employee performance at every organization. The following are five procedures that would have helped in saving the victim company from the huge loss of money.

  • Firstly, the promotions company must have took careful observation in calculating the number of responses from the purchasers. Understanding the total number of responses would have not created the risk at the very first place. The right calculations could have saved the company from paying extra amount of money that went in vain.
  • Secondly, the promotion company must have set a group of workers in a team that would have specifically looked into the process of submission of the numbers and the reports. These e[orts were supposed to be based on the calculation of the numbers, the profile of the company that is paying the money, the performance of the promotion team and the company and their objectives.
  • Thirdly, another check that could have helped in saving the victim company relates to the operations of the victim company itself. A proper procedure on checking the detailed list of purchasers and viewers based on the reports of the promotion company before doing the final payments would have been helpful. This procedure would have involved the members of the finance and management team of the public company.
  • Fourthly, the public company could have asked for the manual batch numbers of responses from the promotion company that could have helped them in viewing the right numbers of purchasers and pay accordingly based on the same.
  • Finally, each of the company could have maintained and operated a risk register and management team to analyze the potential risks based on the human negligence and faults that would have been supportive and helpful in saving the money. Managing a risk register at every organization is highly recommended and that could have helped in the whole situation for better outcomes (Hopkin, 2018).


Section B - (1) Identifying and discussing in detail which internal control could have prevented this fraud and give five (5) examples.

Answer - This particular section is going to discuss the case scenario that relates to the examination on an Australian subsidiary of an American company. The results of this particular case are highly dangerous and clearly not something that is beneficial for any organization. The outcomes resulted in huge loss with the internal control and team members being questioned and harassed at the workplace due to someone else's faults and plans.

In relation to the case study, it can be stated that the actual issue was caused due to the conspiracy and plan of the trade payables clerk. The internal control that could have helped in preventing the whole fraud to take place can be the Bank officials and the banking department.

For example-

i) One can easily understand the role played by the banking department in handling finances and looking at the documents. Careful observations at the documents and cheques could have prevented the whole situation to take place that adversely affected in losing money.

ii) Secondly, the bank officials could have been highly professional in their duties and must not have paid extra belief and trust on the trade payables clerk who actually proved to be the fraud. Had the bank officials been highly professional in checking each cheque and all documents, the case would have not taken place

iii) Another example can be placed in relation to understanding the job duties of the finance department that has only allowed the trade payables clerk to solely conduct the majority of the work relating to submitting and assessing the cheques. This should have n0t been the case if there were more people allocated to do the job.

iv) It is very clear to understand that the cheques were supposed to be signed by the two authorized signatories. These signatories could have paid extra and more attention to the cheques and asked for the necessary documents to cross-check the whole transaction of finances. That could have actually prevented the trade payables clerk to earn money and flew down to Greece.

v) For instance, if the detectives and the police were informed earlier, then they could have also stopped the trade payables clerk to fly down to Greece leaving the country. This would have also helped in punishing the trade payables clerk based on violating the ethics and standards of work at the workplace. However, the clerk escaped and no strong evidence can be presented in against the deeds of the trade payables clerk as the faults were all majorly associated with different levels of operations at the organization.


(2) Identifying and discussing the five (5) procedures could have alerted the auditor to the fraud.

Answer - As discussed in the previous section, the following content is based on the same case that has the trade payables clerk coming out as the fraud. Five procedures that could have alerted the auditor to the fraud are listed below;

  • A strong team management team could have been helpful in monitoring the actions of the trade payables clerk who was the fraud
  • A finance team must have been appointed t carefully analyze and understand the cash flows through cheques and other mediums.
  • If the authorize signatories were careful much and paid extra efforts and attention in understanding the cheques and the related documents, it could have actually prevented the frauds in submitting duplicate cheques.
  • The bank authorities must have been more professional and they should not have trusted and believed the trade payables clerk. If they checked the cheques carefully then the auditor could have been informed about the wrong.
  • As a procedure if a team was appointed to carefully work with the trade payables clerk then her actions could have been noticed and come into people's eye who were working with her. This could have alerted the auditor and prevented the fraud

On a whole, it can be easily concluded that the fraud was able to enjoy the vacation and fly down to Greece was because of the negligence of the people who were working at the organization. The clever and smart plan of using the duplicate cheques and also sponsoring the trip to Tahiti was a fine way to enjoy the money leaving no trace of anything wrong or suspicion. Hence, in order to prevent such issues, companies are required to train their workers to be more professional and act accordingly under any situation.


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