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:

Methadone

A synthetic opioid used for pain relief and as part of drug addiction detoxification and maintenance programs.

Sexually Aggressive

Describes behavior that is forceful and violates the sexual boundaries of another person.

Generously

Willing to give more of something, especially money, time, or resources, than is strictly necessary or expected.

Arousing Provocation

A stimulus or event that elicits a strong emotional response, often leading to heightened alertness or aggression.