accounting information systems 495147

MANAGER PERSUADES EMPLOYEES TO UNKNOWINGLY ALLOW EMBEZZLEMENT BY JONATHAN SPACKMAN, CPA Sandy’s initial success at embezzlement prompted him to try it again. What led Sandy to jeopardize his career and personal well-being, knowing full well that what he was doing was wrong? ABSTRACT Businesses today rely heavily on computers to cut costs, increase transaction speed, create competitive advantages and store vital information. This embrace of computer technology often means moving to large systems and networks. Although these systems and networks come with built-in controls, such as segregation of duties, they can never replace honest management. In this case, a manager under financial pressure used his influence over his employees to bypass the system controls. He was able to embezzle money until one employee courageously stood up to his questionable procedures. BACKGROUND Duarf, Inc. owned several media businesses, such as newspapers, radio stations and magazines. It operated in many of the largest markets in the United States and Canada. The company had grown primarily through acquisitions over the past ten years and still used several of the acquired business systems. Last year, the company decided to centralize all of its accounts payable processing, such as purchase orders, vendor maintenance, invoice processing and check printing. To accomplish this centralization plan, the company purchased the latest technology. Following the purchase, training sessions were held to ensure all processors and management could use all of the system’s functions. This technology included a robust database software package. The software provided internal controls, including matching invoices to purchase orders and receiving reports, signature dollar limits, segregation of processing duties and a controlled vendor list. All of the internal controls associated with the software were adequately designed. They were tested and found to be…