Serena Is the Assistant Controller of Opus Inc

question 52

Essay

Serena is the assistant controller of Opus Inc.As a result of a recent expansion,the controller has been very busy and delegated the signing authority for cheques to Serena.Further,due to the cash accountant leaving on maternity leave,Serena was asked to perform the bank reconciliation until they found someone to replace the cash accountant.
Serena is a qualified accountant and has been able to handle all of these additional tasks.However,she asked her boss for a raise to compensate her for the additional responsibilities that she currently has.Her boss indicated that this was only temporary and the company could not afford a raise for now.
Serena created a vendor in the system with her home address.She has been paying this vendor $2000 for the past 3 months as a means of compensating herself.This theft has yet to be discovered by Opus.
Required: A)What internal controls are missing that enable the theft to occur? B)What audit procedures might detect the theft?

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Definitions:

Research Method

The systematic approach to collecting, analyzing, and interpreting data in order to increase understanding of a topic or issue.

Testable Hypothesis

A hypothesis that can be supported or refuted through experimentation or observation, making it possible to draw conclusions.

Hormones

Chemical messengers produced by the endocrine glands that regulate various bodily functions by traveling through the bloodstream to organs and tissues.

Metabolism

The set of life-sustaining chemical reactions in organisms, allowing for the growth, reproduction, maintenance of structures, and response to their environments.