In a Las Vegas casino, an employee discovered a flaw in the accounting system. T

Question

In a Las Vegas casino, an employee discovered a flaw in the accounting system. The accounts payable clerk discovered that he was able to change the names of vendors in the computer system to his name. He would create false invoices and create a check for the false invoice. The name on the check would be changed to the name of the employee. After the check was printed, the name in the system could then be changed back to the appropriate vendor. The check register would show only the name of the vendor. The fraudulent employee had authorization to sign checks under $1,000. By writing small checks, he was able to defraud the company of $10,000. This fraud was caught by accident. An employee of another department was looking through the vendor list on her computer after the fraudulent employee had changed the vendor name to his name. A few entries later, the vendor name changed again. She wondered how this could occur and asked her supervisor.
Soon after, the fraudulent employee was caught.
1. What kind of fraud is being committed?
2. What percent of frauds are of this type?
3. How could this fraud have been prevented?

Explanation / Answer

In a Las Vegas casino, an employee discovered a flaw in the accounting system. T

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