Question: A purchasing agent for a home improvement center is also part owner in a wholesale lumber company. The agent has sole discretion in selecting vendors

A purchasing agent for a home improvement center is also part owner in a wholesale lumber company. The agent has sole discretion in selecting vendors for the lumber sold through the center. The agent directs a disproportionate number of purchase orders to his company, which charges above-market prices for its products. The agent's financial interest in the supplier is unknown to his employer.

What type of fraud is this and what controls can be implemented to prevent or detect the fraud?

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