Item A. FraudFacts:Susan Green has worked for ABC Company (“ABC”) as the executive secretary in the administrative department for over 10 years. Her apparent integrity and dedication to her work has earned her the reputation of being an outstanding employee and has resulted in increased responsibilities. Her present responsibilities include making arrangements for outside feasibility studies, maintaining client files, working with outside marketing consultants, initiating the payment process, and notifying the accounting department of all openings or closings of vendor accounts. During Susan’s first five years of employment, ABC subcontracted all of its feasibility and marketing studies through Adams and Co. This relationship was subsequently terminated because Adams and Co. merged with a larger, more expensive consulting group. After termination of Adams and Co., Susan and her supervisor selected a new firm to conduct ABC’s market research. However, Susan never informed the accounting department that the Adams and Co. account had been closed.Since her supervisor allowed Susan to approve the voucher package for payment for services rendered, Susan was able to continue processing checks payable to Adams’ account. Due to her supervisor’s complete trust in her, Susan was allowed to sign for all voucher payments less than $10,000.The accounting department continued to process the payments to Adams and Co. and Susan took responsibility for distributing the checks. Susan opened a bank account in a nearby city under the name of Adams and Co., where Susan would deposit the checks. She paid all of her personal expenses out of this new account. Required: Part 4 Item A Assume that you have recently been hired by ABC to help detect and prevent fraud. What internal controls are missing in Susan’s company? What provided Susan the opportunity to perpetrate the fraud? How could this fraud have been prevented? How could this fraud have been detected?

Answered: How could this fraud have been…

Principles Of Marketing

17th Edition

ISBN:9780134492513

Author:Kotler, Philip, Armstrong, Gary (gary M.)

Publisher:Kotler, Philip, Armstrong, Gary (gary M.)

Chapter1: Marketing: Creating Customer Value And Engagement

Section: Chapter Questions

Problem 1.1DQ

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Question

Item A. Fraud

Facts:

Susan Green has worked for ABC Company (“ABC”) as the executive secretary in the administrative department for over 10 years. Her apparent integrity and dedication to her work has earned her the reputation of being an outstanding employee and has resulted in increased responsibilities. Her present responsibilities include making arrangements for outside feasibility studies, maintaining client files, working with outside marketing consultants, initiating the payment process, and notifying the accounting department of all openings or closings of vendor accounts.
During Susan’s first five years of employment, ABC subcontracted all of its feasibility and marketing studies through Adams and Co. This relationship was subsequently terminated because Adams and Co. merged with a larger, more expensive consulting group. After termination of Adams and Co., Susan and her supervisor selected a new firm to conduct ABC’s market research. However, Susan never informed the accounting department that the Adams and Co. account had been closed.
Since her supervisor allowed Susan to approve the voucher package for payment for services rendered, Susan was able to continue processing checks payable to Adams’ account. Due to her supervisor’s complete trust in her, Susan was allowed to sign for all voucher payments less than $10,000.
The accounting department continued to process the payments to Adams and Co. and Susan took responsibility for distributing the checks. Susan opened a bank account in a nearby city under the name of Adams and Co., where Susan would deposit the checks. She paid all of her personal expenses out of this new account.

Required: Part 4 Item A

Assume that you have recently been hired by ABC to help detect and prevent fraud.