What measures could have been taken to prevent the fraud committed by Albert Miano or detect it earlier? The most obvious one is segregation of duties. Separate the duties from dropping off approved invoices and picking up approved invoices. The person who has to sign and approve the invoices should take them directly the AP department. You should always mail out the checks, do not hand them out to clients. The AP department should take the time to look over each invoice. If you have been at their job for more than a year, you should know your bosses signature by now. They should have been able to see it was a forgery. The companies should maintain an up to date list of approved vendors with their addresses. If there is a change it should be verified. The thing this company lacks if internal controls. One way to control is to periodically audit transactions by verifying payable with invoices. Run a report each month, look at the budget, is it too high, if so find out why. Is a project on budget or is the budget out of whack. Why would the AP department pay invoices without proper documentation. The last red flag was his life style and the fact he went four years without a vacation. Run a report to see if there are any duplicated invoice numbers or check numbers. Look to see is the invoices are similar in numbering if the fraudster has added a letter to the end or an extra number.
In today’s world, the computer accounting software has changed a great deal. The software programs available can perform traditional data analysis. However, the employees and/or managers need to be trained on how detect fraud. I really don’t think that billing schemes has changed over the years. Even though technology has changed so have the criminals. They learned to adapt. Some criminals are more proficient with computers than most other individuals. Take my kids for instance, they are 12 and 17, they have more computer knowledge than my husband who is 40....
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