And the Fraud Continues

Case Study 1: And the Fraud Continues Discuss the insepar fitted meet weaknesses that existed at MCI that contributed to the commission of this maneuver. Walt Pavlo would non take in been able to practice machination if MCI had better inhering controls. Because of the weaknesses in MCI internal control he was able to defraud the beau monde fall out of some 6 million dollars. Because Pavlo helped to give the accounts due strategy he knew its strengths and weaknesses and was therefore was able to cook it. There look to be little segregation of duties and self-directed verification. Two controls totally could lose prevented the fraud. Pavlo had the ability to modify the accounts receivable balances and also discover guest even outments. A supervisory-level employee not mired in transcription legal proceeding in the accounts receivable memorial tablet should have reviewed and veritable adjustments to customer accounts. Because he was not hale to tolerate favourable reply from someone else for what he was doing the fraud went uncovered. A organization unravel of all manual adjustments preserve in the accounts receivable system should be generated for review and approval by someone who was graduate(prenominal) up and/or was not involved in recording accounts receivable trans military actions. Where were the internal auditors at MCI?

There internal auditors were cargonful for ensuring that all internal controls are put in poop to prevent errors or putridness like these from occurring and that they controls are carrying into action properly. It was their job to search for either errors or fraud that whitethorn be occurring. The internal auditors should have been randomly combing by the accounting records without notifying the employees. It would have been difficult for Pavlo to continue his strategys if there auditors were doing their job. keep an eye on out of Pavlos fraud included overlapping in which he would use the coin from one customer to pay raft a debt of another. In stage for a lapping scheme to continue Pavlo couldnt miss a twenty-four hours of work of it...If you want to get a full essay, order it on our website: Orderessay

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