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How would the following CAATS controls help detect fraud in the suppliers processes (written in text)
1) comparing the home addresses of employees with the addresses of suppliers, to identify employees who are also suppliers.
2) analysing the sequence of transactions to identify missing invoices.
I do not see the purpose of these for suppliers because:-
1) the co. delivers to debtors not suppliers
2) the co. doesn’t receive invoices from suppliers in sequence order.
1 – You don’t want employees setting themselves up as fake suppliers to receive payments. Eg employee submits a fake invoice that is paid.
2 – Agreed, but many companies will number invoices sequentially upon receipt for their own control purposes to ensure that each can be accounted for later. However, I can’t really see why a missing invoice is likely to cause a loss. A duplicated invoice (eg an extra inserted in the system after numbering) would potentially cause a loss.
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