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Dentistar Inc Internal Audit Case Solution

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Date: 11/17/2014
To: The Director of Internal Audit, Dentistar Inc
From: Fahad Albaijan, Staff Auditor
Subject: Internal Controls Assessment Report – Western Region

Background: Dentistar Inc is a company that was created in 1985 for the purpose of providing dental and orthodontic services to individuals who enjoyed prepaid dental services across the nation. It is imperative to carry out an internal audit of the Western Region’s internal system controls since there have been several reported cases of overdrafts in its operating bank account.
Purpose: The purpose of internal controls audit is to verify and certify that all the internal control processes are functioning as required. It is vital to carry out internal controls audit because
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However, he only does a mathematical recalculation just to ensure that the figures presented by Swindler are the correct amount as far as his calculations were concerned. Sally creates a loophole in the payment system that Swindler might decide to take advantage of and enrich himself. To eliminate this risk, the company is supposed to ensure that Sally actually uses the online information when examining the refund amounts presented by Swindler.
The third weakness of this system is allowing Sally’s signature to be fixed by a machine instead of Sally himself. This also creates a gap that Swindler can use to benefit himself by making multiple copies of a single refund request form. To eliminate this risk, Dentistar Inc is supposed to issue instructions to Sally that he has to personally sign the refund request form.
The fourth and final weakness of this system is that the Information System Group also depends on the Request for Payment Adjustment that is sent by Swindler in order to delete a subscriber from the tracking system. Therefore, if Swindler fails to send such a message then they will not realize that subscriber requested for payment. This challenge can be overcome by closely coordinating the activities of all the
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For example, the check for Bob Turner has been canceled three times, showing that there was fraud in the process of writing them.
In exhibit H, the there are two checks for utilities, successively following each other. Furthermore, they have the same details except for the date and check number. This means that it could have been transacted twice the same transaction.
In Exhibit H, account number 5475-04 is not consistent on the payee and the purpose; therefore, it appears that there was a fraud involved in the transactions.
In exhibit H, the account number 5500-04 does not maintain consistency on the payee and the purpose; hence, it seems that there was a fraudulent transaction.
The payment purpose for account number 5025-04 is contradicting in some ways, and this means that there was a possible fraud during the transactions.
Conclusion: To conclude, it is apparent that the internal controls of Western Region are weak. This is because it is full of loopholes, which some employees are taking full advantages of to benefit themselves at the expense of the organization. All the payment systems are dominated by few people a clear indication of the weakness of the internal
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