CASE STUDY-Internal Controls

Unauthorized access at North Bay

Jessica Sabatia, a former accounts payable clerk for North Bay Health Care Group (NBH), admitted to using her computer to access North Bays accounting software without authorization, and in turn issued various cheques payable to herself and others. Several of the cheques were cashed by Jessica or deposited into her personal bank account, and some were deposited into the bank accounts of others. She attempted to conceal the fraud by altering the electronic cheque registers of North Bay to make it appear as if the cheques had been payable to the companys vendors. The fraudulent scheme resulted in losses to NBH of at least $875,035 over a 2 year period.

Comment on Segregation of Duties at NBH. Is the current segregation of duties effective? Justify your answer (2 marks).