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All-Around Sound Co. discovered a fraud whereby one of its front office administrative em- ployees used company funds to purchase goods, such as computers, digital cameras, and other electronic items for her own use. The fraud was discovered when employees noticed an increase in delivery frequency from vendors and the use of unusual vendors. After some investigation, it was discovered that the employee would alter the description or change the quantity on an invoice in order to explain the cost on the bill.

What general internal control weaknesses?

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Explanation: What are internal controls? Internal controls are the process and procedures put in place by an organisation to control the way things are done. It is a Management process whereby measures are put in place to control the way things are done to avoid fraud by the employees.

Internal controls include : Separation of duties especially between the accounts and procurement dept. That is the procurement department is to make the request for the items needed and the accounts department makes the order and pay for the order while the delivery will be made to the procurement dept and invoice and delivery note will be sent back to the accounts depart for confirmation and filing.

From the above question, the internal control weakness are that it is only one employed that makes a request, order for the requested items, negotiate the price and receives the order from the supplier. There is no internal control measure put in place in the company.

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