11.4 The assistant finance director for the city of Tustin, California, was fired after city of- ficials discovered that she had used her access to city computers to cancel her daugh- ter's $300 water bill. An investigation revealed that she had embezzled a large sum of money from Tustin over a long period. She was able to conceal the embezzlement for so long because the amount embezzled always fell within a 2% error factor used by the city's internal auditors. What weaknesses existed in the audit approach? How could the audit plan be improved? What internal control weaknesses were present in the system? Should Tustin's internal auditors have discovered this fraud earlier?
11.4 The assistant finance director for the city of Tustin, California, was fired after city of- ficials discovered that she had used her access to city computers to cancel her daugh- ter's $300 water bill. An investigation revealed that she had embezzled a large sum of money from Tustin over a long period. She was able to conceal the embezzlement for so long because the amount embezzled always fell within a 2% error factor used by the city's internal auditors. What weaknesses existed in the audit approach? How could the audit plan be improved? What internal control weaknesses were present in the system? Should Tustin's internal auditors have discovered this fraud earlier?
Auditing: A Risk Based-Approach (MindTap Course List)
11th Edition
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter11: Auditing Inventory, Goods And Services, And Accounts Payable: The Acquisition And Payment Cycle
Section: Chapter Questions
Problem 8RQSC
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