Accounting Fraud Detection and Deterrence

Laura committed financial fraud. She took money that belonged to customers from the
bank. She stole from customers as the money and cheques had only been stored at the night
depository or vault and were yet to be accounted for in the books of the Bank. I think that Laura
committed financial fraud because she stole money and other belongings from the bank’s
customers. The money still belonged to the customers as it had not yet been transferred to the
Books of the bank.
  Laura’s manager informed Stacy Boone, the audit investigator at Rocky Mountain Bank,
that two customers had not received their deposits, which had been made the night before. The
manager observed that the deposits made did not reflect in the customer’s accounts despite
deposits of $16,000 having been made the previous night. Boone suspected Laura as she had
been the first person to arrive at the bank the previous morning.
Laura’s fraud was partly contributed by certain internal control weaknesses in the bank’s
system. First, the night vault had only one camera. The camera remained off overnight and was
only switched on at 8.00 am every morning. This left a window that Laura exploited. It meant
that if she managed to get to the bank before 8.00 am, she could access the vault without anyone
noticing her. The camera was off, so she was sure she could walk away with the crime. Another
weakness is that Laura knew that employees had the first half of the combination of the code
required to have access to the vault. She had the second combination and only needed to master
the first half, which she did. The bank should have changed the codes daily in no particular
order. Failure to do so created a line of weakness that Laura took advantage of, thus defrauding
its customers.