stephanie baskill

GROUP #3 BATAC-EDILLON-GAÑA-SIBUG-TUAÑO

STEPHANIE BASKILL

an unemployed accounting clerk who lives one block fromCleaver Manufacturing Company. She gained an unrestricted access to the said the company through the ERP manuals shefound in the dumpsters that were dated 2 months prior.

(Internal Control and Fraud)

Control Structure Weaknesses

Specific Control Techniques and Procedures

1. Control over output documentsERP manuals were discarded in a manner that they can still be retrieved. a. Store the documents in a safe place in the company’s premises while still relevant-With this, the output documents of the company won’t be easily accessed and read by anyone especially by outsiders.b. Shredding or incinerating of documents before discarding them-Knowing that documents of the company are vital to the company’s success, they should be given proper protection even when discarding them from the company. In this way, even if the documents would be out of the company’s premises, there would be no way that they can be retrieved.



2. Inadequate prevention controls regarding the operating system-Stephanie Baskill was able to obtain access of the company’s files through the application of the Trojan horse technique.

c. Prevention controls in the operating system-The company must equip its computer system with a firewall and antivirus software programs to reduce, if not totally eliminate, risks of files being accessed or even destroyed and corrupted. These are some ways of preventing the computer systems to be infected by malicious and destructive programs.



3. Inadequate detection controls regarding the operating system-The company was not able to detect right away the fraud made by Stephanie that made it lose, on average, 125,000 dollars a month. It was only detected after 16 months, which is a very long time for the company not to make a move.d. Detection controls in the operating system--There must be a personnel of the company that is assigned of reviewing the adequacy of the operating system. After detecting threats or destructive programs in the operating systems, appropriate actions must be undertaken as soon as possible.



4. Inadequate review of transactions and company’s records-Changes in the transaction logs made by Stephanie were not noticed. This is either because, management reports were not properly reviewed or changes were not properly reflected and recorded.e. Proper and frequent review should be conducted-Management should properly and carefully review any changes or additions to vendors or suppliers’ list that were reflected for accuracy.

f. Message Sequence Numbering and Message Transaction Log must be implemented

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GROUP #3 BATAC-EDILLON-GAÑA-SIBUG-TUAÑO

stephanie baskill

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