An audit department has received anonymous information that an employee has allegedly been able to steal and cash checks sent to the organization by customers. What is the most efficient way for an auditor to determine how this type of fraud could occur and who might be the perpetrator?
To determine how an employee could steal and cash checks sent to the organization, the most efficient method would involve examining the endorsements and banks of deposit on customers' canceled checks. This can reveal any discrepancies such as unauthorized endorsements or deposits into suspicious accounts, directly leading to the identification of fraudulent activity and possibly the perpetrator. Confirming accounts receivable or payable would not provide this specific detailed forensic information. While flowcharting and analyzing key controls can help identify potential weaknesses, it may not efficiently reveal the specific fraudulent actions or the perpetrator in this case.
Option D is the correct answer because flowcharts assist in determining how roles and responsibilities are allocated and if there is proper segregation of duties.
Can I have the explanation for the answer opted
why not C
Why not C... Because stolen checks may not be available.