Accounting: Competent Personnel and Rotating Duties
Short summary of the article 1.
Two former Singapore Land Authority (SLA) officers, Former deputy director of technology and infrastructure, Koh Seah Wee, 41, was sentenced to 22 years in jail, and his subordinate, former manager Lim Chai Meng, 38, was sentenced to 15 years for being involved in a $12 million fraud case. With the help of seven other external parties they were able to create fraud by altering the accounts. They misused the company’s money for their own use.
With the money they divested cash to various accounts to their relatives and invested in private properties, unit trusts, stocks and shares. Koh also bought his wife and mother-in-aw two luxury cars worth up to about $1.9million.
A) Internal Control
1.Competent personnel and rotating duties: Allowing accounting employees must be adequately trained and supervised in performing their jobs. It may also be advisable to rotate duties of employees. In this way, existing errors or fraud may be detected.
They failed to hire competent personnel, former manager, Lim Chai Meng was not adequately trained and supervise in his job.
Quote from article: “Working in collusion with seven external parties, the men had - in the time between Jan 2008 and March 2010 - cheated SLA by rendering false invoices through various business entities for IT services and goods which were not delivered.”
2.Proof and security measures: Proofs and security measures should be used to safeguard assets and ensure reliable accounting data. This control procedure applies to may dfferent technique, such as authorization, approval, and reconciliation procedures.
The company fail to have authorisation of approval for invoices by reliable accounting data. Therefore Koh and Lim were able to render the invoice and embezzle the company’s funds.
Quote from article: “In all, SLA paid $12.2 million in 282 contracts to 11 bogus vendors. To date, $9 million out of the total amount has been recovered”
3.Separating responsibility
Two former Singapore Land Authority (SLA) officers, Former deputy director of technology and infrastructure, Koh Seah Wee, 41, was sentenced to 22 years in jail, and his subordinate, former manager Lim Chai Meng, 38, was sentenced to 15 years for being involved in a $12 million fraud case. With the help of seven other external parties they were able to create fraud by altering the accounts. They misused the company’s money for their own use.
With the money they divested cash to various accounts to their relatives and invested in private properties, unit trusts, stocks and shares. Koh also bought his wife and mother-in-aw two luxury cars worth up to about $1.9million.
A) Internal Control
1.Competent personnel and rotating duties: Allowing accounting employees must be adequately trained and supervised in performing their jobs. It may also be advisable to rotate duties of employees. In this way, existing errors or fraud may be detected.
They failed to hire competent personnel, former manager, Lim Chai Meng was not adequately trained and supervise in his job.
Quote from article: “Working in collusion with seven external parties, the men had - in the time between Jan 2008 and March 2010 - cheated SLA by rendering false invoices through various business entities for IT services and goods which were not delivered.”
2.Proof and security measures: Proofs and security measures should be used to safeguard assets and ensure reliable accounting data. This control procedure applies to may dfferent technique, such as authorization, approval, and reconciliation procedures.
The company fail to have authorisation of approval for invoices by reliable accounting data. Therefore Koh and Lim were able to render the invoice and embezzle the company’s funds.
Quote from article: “In all, SLA paid $12.2 million in 282 contracts to 11 bogus vendors. To date, $9 million out of the total amount has been recovered”
3.Separating responsibility