Fact Pattern: Management discovers that a supervisor at one of its restaurant locations removes excess cash and resets sales totals throughout the day on the point-of-sale (POS) system. At closing, the supervisor deposits cash equal to the recorded sales on the POS system and keeps the rest. The supervisor forwards the close-of-day POS reports from the POS system along with a copy of the bank deposit slip to the company’s revenue accounting department. The revenue accounting department records the sales and the cash for the location in the general ledger and verifies the deposit slip to the bank statement. Any differences between sales and deposits are recorded in an over/short account and, if necessary, followed up with the location supervisor. The customer food order checks are serially numbered, and it is the supervisor’s responsibility to see that they are accounted for at the end of each day. Customer checks and the transaction journal tapes from the POS system are kept by the supervisor for 1 week at the location and then destroyed.
Which of the following controls allowed the fraud to occur?
A.The accounting for customer food checks by the supervisor.
B.The deposit of cash receipts by the supervisor.
C.The matching of the bank deposit slips to the bank statement by revenue accounting.
D.The forwarding of the close-of-day POS reports to revenue accounting.
A. The accounting for customer food checks by the supervisor.
An inappropriate segregation of duties existed because the supervisor was responsible for accounting for customer food checks and depositing receipts and had the ability to reset POS totals throughout the day.
(this multiple choice question has been scrambled)