You began your new job as the accountant at Bolivar Industries during the month of December. During your first month, you found several interesting issues.?
1) While looking through the invoices, you found Invoices 213-242, 245-271, and 275-290. It appears that invoices243, 244, 272, 273, and 274 are missing.?
2) During the month, Clerk # 3 issued $250 in refunds as compared to Clerks #1, #2, and #4 who issued less than$50 each.?
3) The daily cash receipts and bank deposits reconcile, except on Tuesdays during the month.?
4) Business is generally brisk during the holiday season, but two weeks before Christmas there was a suddenincrease in slow payments.

?Required
(a) What kind of warning signs could be associated with these issues?
(b) What control could you put in place regarding cash refunds mentioned in (a)(2)?

(a)1) Missing invoices or gaps in transaction numbers could mean that the invoicesare being used for fraudulent transactions.?
2) An unusually high number of refunds for Clerk #3 could mean that theindividual is creating fictitious refunds and pocketing the cash.?
3) The difference could mean that receipts are being pocketed before beingdeposited. Maybe there is a person responsible for making the deposits onTuesdays that is the culprit.?
4) A sudden increase in slow payments could mean that an employee ispocketing the payments.?

(b)Surveillance cameras at customer service area.Place supervisor as a second authorizer on refund transactions.Prohibit cash refunds and require exchanges of merchandise instead.Provide employee training.Incorporate special alerts for critical dollar thresholds through company software.Require information about the original transaction to be part of the refund process.