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Accounting Information Systems 9th Edition by James Hall
Edition 9ISBN: 978-1133934400Accounting Information Systems 9th Edition by James Hall
Edition 9ISBN: 978-1133934400 Exercise 31
FRAUD SCHEME
A city health inspector threatens to close down a restaurant by issuing a fake health violation notice if the owner does not make a financial payment to the inspector. If the restaurant owner does not cooperate, he will not be able to open for business and the publicity will drive away his customers permanently. Faced with a threat of economic loss, the owner makes the payment.
Required
What type of fraud is this, and what controls can be implemented to prevent or detect the fraud?
A city health inspector threatens to close down a restaurant by issuing a fake health violation notice if the owner does not make a financial payment to the inspector. If the restaurant owner does not cooperate, he will not be able to open for business and the publicity will drive away his customers permanently. Faced with a threat of economic loss, the owner makes the payment.
Required
What type of fraud is this, and what controls can be implemented to prevent or detect the fraud?
Explanation
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Fraud Scheme:
• The kind of fraud where...
Accounting Information Systems 9th Edition by James Hall
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