7-1 Discussion: Potential Vulnerabilities

Your team has been reviewing financial information for the past two years while performing a fraud risk assessment. You noticed that the sales returns for one store increased faster than sales did, and faster than sales returns for other stores. However, there wasn’t a corresponding increase in returned inventory or vendor credit for returns. Your team also found that the same employee who approved sales returns was responsible for logging in the returned inventory and determining if it was able to be resold or needed to be returned to the vendor. You further found that the sales returns were traced to receipts that were not part of the store’s receipt sequencing. They appeared to be random numbers. The employee created fake sales receipts for nonexistent merchandise and issued refunds to fictitious customers while keeping the money.

Create one initial post and respond to at least two of your classmates.

For your initial post, address the following:

1. What potential vulnerabilities should your team consider during the fraud risk assessment in the scenario?
2. What fraud prevention strategies can you recommend to address these vulnerabilities?
3. What is a question that should be asked during a fraud risk assessment to identify potential vulnerabilities, and why should this question be asked?