A company has discovered that a fraud has been committed by an employee who was making unauthorized
Question:
A company has discovered that a fraud has been committed by an employee who was making unauthorized transactions using a company credit card. The total amount of the fraudulent transactions was $20,000. The company has a policy of charging interest at a rate of 1.5% per month on any unpaid balances on the credit card. The employee has agreed to pay back the entire amount of the fraudulent transactions over a period of 12 months, with interest.
a) Calculate the monthly payment the employee will have to make to pay back the entire amount of the fraudulent transactions with interest.
b) Calculate the total amount of interest the employee will pay over the 12-month period.
c) If the employee misses a payment, how much additional interest will be charged on the remaining balance for the following month?
Auditing a business risk appraoch
ISBN: 978-0324375589
6th Edition
Authors: larry e. rittenberg, bradley j. schwieger, karla m. johnston