A company has been experiencing losses due to fraud in its inventory management system. After a thorough
Question:
A company has been experiencing losses due to fraud in its inventory management system. After a thorough investigation, the company has identified several fraudulent transactions. The company's internal audit team has determined that the fraud involves overbilling for inventory items. The team has found that the fraudster, a company employee, has been overbilling the company for several items on each transaction.
The following information is available for one of the fraudulent transactions:
- Total amount of the transaction: $10,000
- Number of items billed: 50
- Actual cost of each item: $150
- Invoice cost of each item: $200
Calculate the overbilling amount for the transaction, the percentage of overbilling, and the total overbilling amount for all the fraudulent transactions identified so far.
(Show all calculations and round to the nearest cent.)
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston