Accounting Information System Report: Fraud Prevention and Detection

This report analyzes an accounting information system, focusing on fraud prevention and detection within a business context. The report addresses two scenarios: one involving a public company overpaying a promotions company due to inflated response numbers, and the other concerning excessive freight and travel expenses in an American subsidiary. The report identifies five procedures and checks to mitigate risks in the first scenario, emphasizing authorization, performance reviews, data processing, segregation of duties, and physical controls. In the second scenario, the report details internal controls to prevent fraud, including authorization, authentication, transaction verification, validation measures, and account reconciliation. It also outlines five auditing procedures to detect fraud, such as signature verification, check kiting checks, random audits, inspection of employee behavior, and rotation of duties. The report references relevant accounting standards and provides a comprehensive overview of control activities, business processes, and accounting principles.