Purchasing, Inventory, and Cash Disbursements: Common Frauds and Internal Controls

Chapter 1 The Acquisitions Cycle: Ordering, Receiving, and Warehousing   1-1

The Acquisitions Cycle   1-2

Ordering  1-3

Receiving and Warehousing   1-7

Variations of the Typical Acquisitions Cycle   1-10

Manufacturing Environment   1-11

Retail Environment   1-12

Services  1-13

Smaller Entity  1-14

Internal Controls in the Ordering, Receiving, and Warehousing Processes  1-15

Errors, Fraud, and Controls   1-17

Control Matrix   1-20

Summary   1-23

Practice Questions   1-24

Chapter 2 Cash Disbursements Cycle   2-1

Cash Disbursements   2-2

Typical Cash Disbursements System  2-3

Internal Controls in the Example Retail System  2-10

Errors, Fraud, and Controls   2-12

Control Matrix   2-17

Services   2-18

Electronic Data Interchange (EDI) Overview   2-19

Cash Disbursements Fraud Statistics   2-20

Cash Disbursement Frauds Other Than Billing   2-22

Cash Register Disbursement Frauds and Theft of Cash on Hand  2-26

Summary   2-27

Practice Questions   2-28

Chapter 3 Payroll and Expense Reimbursement Cycles   3-1

Payroll System  3-3

Internal Controls in the Example Payroll System  3-9

Additional Payroll System Controls  3-11

Control Matrix   3-15

Other Compensation Methods   3-16

Other Payroll Compensation Issues   3-17

Summary   3-21

Chapter 4 External Auditing and Forensic Investigations: Conceptual and Procedural Differences   4-1

Overview   4-2

Differences Between External Audit and Forensic Procedures and Principles   4-4

Summary  4-9

Glossary

Index

Solutions

Chapter 1  Solutions 1

Chapter 2  Solutions 3

Chapter 3  Solutions 6

Chapter 4  Solutions 7