John Smith worked in the stockyard of a large building supply company. One day he unexpectedly left for California, never to return. His foreman seized the opportunity to continue to submit time cards for John to the payroll department. Each week, as part of his normal duties, the foreman received the employee paychecks from payroll and distributed them to the workers on his shift. Because John was not present to collect his paycheck, the foreman forged John Solution In the given circumstances, these two internal controls can be implemented to prevent & detect fraud- 1. The practice of giving paychecks to the foreman should be done away with. Instead each employee should personally visit the payroll department, put his signature and then collect his or her paycheck. 2.For attendance purpose also the employees should visit the payroll department where the time keeper will personally accept each one\'s time card. Time card furnished through a colleage or friend should never be accepted. .

1. John Smith worked in the stockyard of a large building supply company. One day he
unexpectedly left for California, never to return. His foreman seized the opportunity to continue
to submit time cards for John to the payroll department. Each week, as part of his normal duties,
the foreman received the employee paychecks from payroll and distributed them to the workers
on his shift. Because John was not present to collect his paycheck, the foreman forged John
Solution
In the given circumstances, these two internal controls can be implemented to prevent & detect
fraud-
1. The practice of giving paychecks to the foreman should be done away with. Instead each
employee should personally visit the payroll department, put his signature and then collect his or
her paycheck.
2.For attendance purpose also the employees should visit the payroll department where the time
keeper will personally accept each one's time card. Time card furnished through a colleage or
friend should never be accepted.