At the Beginning of This Chapter,you Were Presented with a Situation

question 54

Essay

At the beginning of this chapter,you were presented with a situation regarding Jason Scott.Jason is an internal auditor for Northwest Industries,a forest products company.On March 31,he reviewed his completed tax return and noticed that the federal income tax withholding on his final paycheck was $5 more than the amount indicated on his W-2 form.He used the W-2 amount to complete his tax return and made a note to ask the payroll department what happened to the other $5.The next day,Jason was swamped,and he dismissed the $5 difference as immaterial.On April 16,a coworker grumbled that the company had taken $5 more from his check than he was given credit for on his W-2.When Jason realized he was not the only one with the $5 discrepancy,he investigated and found that all 1,500 employees had the same $5 discrepancy.He also discovered that the W-2 of Don Hawkins,the payroll programmer,had
thousands of dollars more in withholdings reported to the Internal Revenue Service (IRS)than had been withheld from his paycheck.
Identify the type of fraud scheme may have happened as described.Describe controls you would implement to address the fraud risk,and label each control as preventive or detective.

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Definitions:

Zygomatic Arch

The bone structure that forms the prominence of the cheek, extending from the zygomatic process of the temporal bone to the zygomatic bone.

Temporomandibular Joint

A hinge joint that connects the lower jaw (mandible) to the temporal bone of the skull, facilitating mouth movement.

Sagittal Suture

The fibrous joint between the two parietal bones of the skull, running from the front to the back of the head.

Anterior Fontanel

A soft, membranous gap between the bones of an infant's skull, which allows for brain growth and ossifies as the child matures.