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1. The Trolley Dodgers
(a) There are three major internal control weaknesses in the Dodger’s payroll system which allowed Campos to perpetuate the payroll fraud undetected. The first weakness is that there was no separation of duties. Campos was solely in charge of the entire payroll system, thus the company lacked a system of checks-and-balances to prevent payroll fraud.
The second weakness is that there was no data security. This was caused by the absence of security controls which meant that Campos could manipulate payroll data undetected. The third weakness is that the organization lacked a strong system of internal audit and external audit. Random and regular audit reviews would have enabled Dodger’s to detect the payroll fraud.
(b) There are various audit procedures that might have detected the fraudulent scheme. Since the scheme primarily involved fictitious employees and routine inflation of the number of hours worked, the primary strategy the organization could have used is...
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