Credit memos are created when a product is returned. A debit to Sale: Returns and Allowances and a credit to Accounts Receivable is recorded when a credit memo is created. A credit memo will reduce Accounts Receivable and write off the invoice. You have noticed that the Accounts Receivable clerk, Wes, has created an abnormally high number of credit memos You notice the inventory does not reflect the additional inventory resulting from the Sales Returns and Allowances. What do you do? How can the company safeguard against such possible fraud