Assignment on Potential fraud scheme

To overcome the issue that she could commit an act of fraud by falsifying order and internal account, the best strategy is to hire a separate employee that will be responsible for the inventory payment, inventory orders, and keeping the record of inventory. The divided responsibility between two employees will reduce the probability of any fraud and falsifying orders. This divided responsibility strategy will prevent individuals from autonomously falsifying orders to be paid for external accounts.

Potential fraud scheme of Potential fraud scheme

Karlos is fully responsible for the custody of assets and also, she is responsible for keeping all record of the inventory in such cases, there is a possibility of getting involved in any fraudulent activity. Karlos, single-handed should not be involved in all the responsibilities in the business. She is the owner of the small craft shop in Colombo and has to do a lot in her business. She must hire someone else to help her and taking over some areas of work.

Potential fraud scheme of Potential fraud scheme

Both Karlos and Lateef have complete access to the accounting system, and it is a particular type of issue that can be resolved. The issue could lead to small variations in the records of accounting and sales by Lateef even Karlos may not be able to realize it. It is important to engage both of them on separate duties to keep the record valid and consistent.

Potential fraud scheme of Potential fraud scheme

Lateef is keeping all the records and preparing bank deposits. By having a separation of duties one employee must be involved in keeping records of sales as well as depositing money for the sales. The important consideration is to keep the duties of all members separate from one another. In a real situation, it could be harder for individuals to commit any type of fraud.

Potential fraud scheme of Potential fraud scheme

In the store of Karlos, she may have petty cash funds that can be incorrectly reimbursed from the funds. In order to prevent such issues, it is important to ensure that the reimbursements of petty cash funds are accurate, and they are under complete access controls. Karlos must be considered as a custodian that means she is the only person who can make and withdraw any payments. Karlos is serving as a custodian and she will be responsible for collecting receipts that prove accurate reimbursement.

Potential fraud scheme 5

In the store of Karlos, she has introduced a new program that is a coupon discount program and employees will be scanning the information on the coupon and the customers will charge for the services. The store of Karlos has several limited evidence that are going through the processing of transactions. The clerks must have to enter all the information and amounts in the system. She will keep the whole coupon information with the information and receipt of the transaction. 

Potential fraud scheme 6

In this situation of work, there is limited evidence to track the hours for each employee to work in the store. In her store, Karlos must implement a system of time card that will keep a record of entering the store and then leaving the store. The system will track all the information and activities of all the employees in the store. The tracking system will measure the time limit for when employees to work on. The new system will be beneficial for the employees in keeping all the records.

Potential fraud scheme 7

The owner of the store is Karlos, and she the only person in the store who have full authority for taking decisions. The employees are working on the limited authority conditions and they are not allowed to take any decision. The employees in the store are allowed to keep the records of transactions that are mainly related to the person and the whole sales process. To double-check the authority and security system the new security system will be placed, complete cameras will be working to monitor the working process, transaction process and accounting system in the store. There is no other way to know about the employee and their responsibilities for credit card sales.