Explain how the principle of separation of duties is violated in each of the following situations.

Also, suggest one or more procedures to reduce the risk and exposure.
1. A payroll clerk recorded a 40-hour work-week for an employee who had quit the previous
week. He then prepared a paycheck for this employee, forged her signature, and cashed the
check.

2. While opening the mail, a cashier set aside, and subsequently cashed, two checks payable to
the company on account.

3. A cashier prepared a fictitious invoice from a company using his brother-in-law’s name. He
wrote a check in payment of the invoice, which the brother-in-law later cashed.

4. An employee of the finishing department walked off with several parts from the storeroom and
recorded the items in the inventory ledger as having been issued to the assembly department.

5. A cashier cashed a check from a customer in payment of an account receivable, pocketed the
cash, and concealed the theft by properly posting the receipt to the cus- tomer’s account in the
accounts receivable ledger.

6. Several customers returned clothing purchases. Instead of putting the clothes into a return bin
to be put back on the rack, a clerk put the clothing in a separate bin under some cleaning rags.
After her shift, she transferred the clothes to a gym bag and took them home.
7. A receiving clerk noticed that four cases of MP3 players were included in a ship- ment when
only three were ordered. The clerk put the extra case aside and took it home after his shift ended.
8. An insurance claims adjuster had check-signing authority of up to $6,000. The ad- juster
created three businesses that billed the insurance company for work not per- formed on valid
claims. The adjuster wrote and signed checks to pay for the invoices, none of which exceeded
$6,000.
9. An accounts payable clerk recorded invoices received from a company that he and his wife
owned and authorized their payment.
10. A cashier created false purchase return vouchers to hide his theft of several thousand dollars
from his cash register.
11. A purchasing agent received a 10% kickback of the invoice amount for all purchases made
from a specific vendor.
I choose Topic 3,6 and 7
Topic 3: The segregation of duties is violated because the cashier can write check and approve
the check for the invoice payment if this happen to any organization continuely this can make an
organization deficit or more further worse is bankrupt. And my solution is the cashier should
don’t have access to approve the check for the invoice payment, the cashier should have access
only to write the check and for the approve check should be trusted people on the organization.
Topic 6: the clerk had authorized to accept the return and have custody of the inventory. It is
also possible that the clerk may have had responsibility to record the returns, but did not do so to
cover the theft of the cloth. My solution for this problem are first the store should have CCTV on
the store so can maintain all the clerk on working site. Second the clerk cannot carry the clothing
until left to the workingsite so this theft can be reduce and the third solution is the return area
must be clean so that returns cannot be hide from excess returns.
Topic7: The problem is while the receiving clerk didn’t record the purchase order she/he didn’t
have access to the document that allow to order. This process make he/she to steal the product
without having the record to conceal it. Head of werehouse must check the delivery order same
quantity and product on the shipment and the receipt, so this incident can be reduced.and the last
I have best solution the order that receiving to the area should’t indicate the quantity of the item
so the employee cant manipulate the product on the receipt.