Collectors at Tollbooths A and B (figure is shown below) have colluded to perpetrate a fraud. Each day, Tollbooth Collector B provides A with a number of toll tickets prestamped from Tollbooth B. The price of the toll from Point B to Point A is 35 cents.
The fraud works as follows:

Drivers entering the turnpike at distant points south of Point B will pay tolls up to $5. When these drivers leave the turnpike at Point A, they pay the full amount of the toll printed on their tickets. However, the toll-booth collector replaces the tickets collected from the drivers with the 35-cent tickets provided by Collector B, thus making it appear that the drivers entered the turnpike at Point B. The difference between the 35-cent tickets submitted as a record of the cash receipts and the actual amounts paid by the drivers is pocketed by Tollbooth Collector A and shared with B at the end of the day. Using this technique, Collectors A and B have stolen more than $20,000 in unrecorded tolls this year.

What control procedures could be implemented to prevent or detect this fraud? Classify the control procedures in accordance withCOSO.

  • CreatedAugust 11, 2014
  • Files Included
Post your question