Question: SCENARIO What went wrong in the organisation's structure that allowed the issue to occur? What is your recommendation(s) that the organisation can follow to prevent

 SCENARIO What went wrong in the organisation's structure that allowed the

SCENARIO What went wrong in the organisation's structure that allowed the issue to occur? What is your recommendation(s) that the organisation can follow to prevent the activity from occurring again? City Bicycle Shop works with many B2B companies to buy bicycle parts. Each month, Zhang manages invoice payments for all vendors. One day, Zhang decided to try and gain some extra cash. He decided that when he would write checks to the vendor, he would also write a separate check to himself and code the charge to the vendor. For example, City Bicycle Shop owed Acme Trinkets $500. Zhang wrote the check to Acme Trinkets as $500 and wrote a separate check to himself for $100 and coded it in the accounting system as ACME. Zhang continued this process for five years, stealing $300,000 in cash. Fraud was only discovered when Zhang fell very ill for a few weeks and a temporary accounting employee discovered it

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!