Question

Fraud at Wooten’s city hall.

Required:
a. Which internal control activity was violated in order for Mr. Peterman to perpetrate this fraud?
b. Do you consider this case to be an example of management fraud or employee fraud?
c. Was the city’s procedural manual adequate for prescribing internal controls to prevent this type of fraud?
d. Why do you think no one reported the unusual mailroom practices of Mr. Peterman? To whom would such a violation be reported? Why or why not?
e. Do you think a business in Wooten could be guilty of customer fraud if it agreed to deliver its payments to Mr. Peterman personally rather than send them to the city’s mailing address?
f. The comments made by the neighbor CFO express which type of limitation of internal control systems discussed in this chapter?



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  • CreatedDecember 30, 2014
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