Sally Smith was the Treasurer of University Hospital. Ms. Smith perpetrated a $15 million fraud over a
Question:
Sally Smith was the Treasurer of University Hospital. Ms. Smith perpetrated a $15 million fraud over a ten-year period. The fraud was accomplished through a “secret bank account” opened by Smith in the name of the Hospital Patient Reserve Account. Smith created phony invoices for the Hospital Patient Reserve Account, writing checks in payment from one of the Hospital’s bank accounts, and payable to the “Treasurer”. She would then deposit the checks into the secret account to pay her personal expenses. Additionally, she would prepare bank reconciliations for the accounts, made deposits, and was provided sole access to all statements, and correspondence from the University Hospital’s account.
Identify the various weakness in internal controls, and how the University Hospital might have prevented such a loss.
Fraud examination
ISBN: 978-0538470841
4th edition
Authors: Steve Albrecht, Chad Albrecht, Conan Albrecht, Mark zimbelma