IDEA Project
Madon Oilfield Services, Inc.
Part 1
1. Sherika Spies is the head of payroll. She is also the wife of Tim Spies who is the Lafayette Branch Manager.
2. Sherika could write extra payroll and bonus checks for her and her husband, which could easily be done since Bernie was usually out of the office and she also had his signature on a rubber stamp. Sherika could set up a ghost employee as well as write other employees an extra payroll or bonus check for them and receive a kickback from that employee.
3. Ghost employees are fake employees or employees that have been terminated and are used to cut a payroll check to, to take money from the company.
4. Check for multiple employees using the same address or the same bank account. Check to make sure no terminated employees are being paid. Look for paychecks without deduction for payroll taxes. There should be a segregation of duties between payroll preparation and check disbursements. Using direct deposit risks of alteration, forgery, and theft can be lowered. Also look for variations between the budget for payroll and actual payroll.
5. There is an opportunity present here due to the non-existent/limited separation of duties. Greed as well as a low possibility to get caught since Bernie only checked the payroll reports once a year. Bernie is tough on his employees and they work long hours so they may feel like they deserve a higher compensation.
6. The organization also suffers from the fraudulent payroll checks since they have to pay payroll taxes and possible retirement payments. The organization will also incur extra expenses when they have to pay fraud auditors to detect the fraud as well as any other potential legal fees.
7. No, there could be some payroll checks that weren’t entered into the system.
8. At least one other person is needed to review the payroll that Sherika is entering. Someone other than Sherika should be processing and reviewing her and her husband’s paychecks.
Part 1
1. Sherika Spies is the head of payroll. She is also the wife of Tim Spies who is the Lafayette Branch Manager.
2. Sherika could write extra payroll and bonus checks for her and her husband, which could easily be done since Bernie was usually out of the office and she also had his signature on a rubber stamp. Sherika could set up a ghost employee as well as write other employees an extra payroll or bonus check for them and receive a kickback from that employee.
3. Ghost employees are fake employees or employees that have been terminated and are used to cut a payroll check to, to take money from the company.
4. Check for multiple employees using the same address or the same bank account. Check to make sure no terminated employees are being paid. Look for paychecks without deduction for payroll taxes. There should be a segregation of duties between payroll preparation and check disbursements. Using direct deposit risks of alteration, forgery, and theft can be lowered. Also look for variations between the budget for payroll and actual payroll.
5. There is an opportunity present here due to the non-existent/limited separation of duties. Greed as well as a low possibility to get caught since Bernie only checked the payroll reports once a year. Bernie is tough on his employees and they work long hours so they may feel like they deserve a higher compensation.
6. The organization also suffers from the fraudulent payroll checks since they have to pay payroll taxes and possible retirement payments. The organization will also incur extra expenses when they have to pay fraud auditors to detect the fraud as well as any other potential legal fees.
7. No, there could be some payroll checks that weren’t entered into the system.
8. At least one other person is needed to review the payroll that Sherika is entering. Someone other than Sherika should be processing and reviewing her and her husband’s paychecks.