$7$

Multiple Answer $20$ points

Paul Smith is the warehouse manager for a large office supply wholesaler. Paul receives two copies of the customer sales order from the Sales Department. He picks the goods

from the shelves and sends them and one copy of the sales order to the shipping department. He then files the second copy in a temporary file. At the end of the day, Paul

retrieves the sales orders from the temporary file and updates the Inventory subsidiary ledger from a terminal in his office. At that time he identifies items that have fallen to

low levels, selects a supplier, and prepares three copies of a purchase order. One copy is sent to the supplier, one goes to the Account Payable clerk, and one is filed in the

warehouse.

When the goods arrive from the supplier, Mr$.$ Paul reviews the attached packing slip, counts and inspects the goods, places them on the shelves, and updates the inventory

ledger to reflect the receipt. He then prepares a receiving report and sends it to the Accounts Payable department.

Paul receives copies of credit sales orders from the sales department. From these documents he accesses the AR subsidiary ledger from her office computer and records the

AR$.$ He then records the sale in the sales journal and posts the transactions to the general ledger accounts. Cash receipts in payment of customer accounts receivable come

directly to her office. He records the cash receipts in the GL cash and AR accounts and updates the AR subsidiary ledger. He then endorses the checks "for deposit only" and

deposits them in the bank at the end of each day.

What sort of frauds are possible in this system? $($Select all that apply$)$

Skimming

Check tampering

Kickback fraud

Theft of inventory

Nonexistent employee fraud

Vendor fraud

Cash Larceny