Essay about Case Study : Coach Inc.

770 Words Nov 12th, 2015 4 Pages
Coach Inc. is exposed to (1) employee theft; an employee may order special items to be stolen, steal items from a normal delivery, or may have the goods delivered to another location if proper inventory controls and segregation of duties are not implemented. (2) Fraud through the falsification records and a purchase inventory orders; an employee could be creating bogus invoices in order to request payment from Coach and keeping the money for personal use. (3) Theft and financial fraud; an employee in charge of accounts receivables could be embezzling money by posting a customer’s payment on another customer’s account and keeping the money instead of posting it to the accounts receivable account or a manger might be understating inventory balances on financial statements.

Extended procedures to detect fraud by the fabrication of purchase orders.
To detect fraudulent purchases request, and false entries of inventory to the general ledger; (1) I will observe the segregation of duties between the person that approves payment for vendor invoices and the person that creates the purchase order, the same person should never process purchase request and payments. (2) I will ensure that the receipt of materials into the perpetual records is also done by different staff member and that a copy of the receipt document is attached to the invoice and that is verified against the purchase order. (3) I will select a sample of vendor invoices and inquire about the vendor’s company name,…

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