Question

The Morgan Department Store has approximately 1,000 customer accounts. Each month a special clerk opens the mail and prepares a remittance list of all monies received on account. The checks are then sent to a cashier for further processing. In addition, copies of the remittances are sent to accounting and data processing services. At the computer services office, an operator keys the remittances directly onto a disk file. The disk file is then used to update the accounts receivable master file. The computer operator has devised an interesting scheme for defrauding the company. The operator keys in approximately a $ 100 credit to a friend’s account each month. The operator and the friend agree in advance about the amount to be keyed in. The friend will then make purchases exactly in this amount. Normally, the error entered into the system by this procedure would be detected by the batch control totals; however, the operator decreases the amount credited to a number of other accounts. In each case, the amount of the decrease is only $ 1 or $ 2. Because the error is very small, most customers let it go unnoticed. However, in a relatively small number of cases where they do detect the error, corrections are made on an authorized basis without further comment. For example, in the previous month, a total of $ 10 worth of corrections was made because of the complaints. However, these corrections were all processed semi- automatically by the system, and no one realized that it was part of a cover- up.

Required
What can be done to detect and prevent this problem relating to input manipulation?



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  • CreatedFebruary 26, 2015
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