Livalife Insurance is a large insurance company with offices scattered throughout the United States and more than 1,000 independent agents. You are a member of the external audit team. During the year-end work, you are called to a meeting with your manager. He explains that he is concerned about the activities of one agent who seems to have submitted an abnormal number of change-of-address forms for her clients. All the change-of-address forms give a single new address-namely, the àgent's home address. On many of the policies taken out by the agent's clients, personal loans have been obtained. Your manager explains that he is concerned that the agent might be illegally obtaining policy loans on her clients' policies, unbeknown to her clients.

Required: Explain how you could use generalized audit software to find out whether the agent has been illegally taking out policy loans on her clients' policies. Assuming that the agent has been acting illegally, what controls would you recommend instituting to prevent this type of fraud happening again?