Question

B. A purchasing manager for Weibo Hardware Berhad has sole discretion in selecting vendors for the parts and supplies sold by the company. The manager directs a disproportionate number of purchase orders to a supply company owned by the manager’s brother in law which charges above market prices for its products. The manager’s relationship with the vendor is unknown to his employer. REQUIRED: (a) Explain the type of fraud in the situation above. (b) Discuss the control procedures that can be implemented to prevent the fraud.

Answer 1

Answer:

The manager directs a disproportionate number of purchase orders to a supply company owned by the .

Explanation:

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