Aesop

The Assistant Vice Chancellor of Communications for Aesop, Lawrence Fairbanks, was considered as an individual with high standing. He received the authority to purchase objects that were up to $2,500 without any regulations or supervision. He was treated with respect and was well liked by his friends and staff of the University before he was caught and arrested for fraudulent behavior. He took advantage of the Universities accounting procedures and decided to manipulate and change it for monetary gain. Thus, enabled him to be fired from the University and ruin his reputation. This behavior affected him significantly because it overshadowed his success. The Assistant Vice Chancellor decided to replace the vendor invoices with false invoices from other suppliers. Thus, he was caught by the accounting department because the descriptions of the actual invoices were supposed to be consistent with the operations of the Communications Department and the false invoices did not match. The accounting department was able to investigate this and present the invoices to its Accounts Payable and investigate which were for payment. The Accounting department performed well in internal controls to help protect the assets of the business from misuse and theft by the Assistant Vice Chancellor. Otherwise, he could have escaped with making purchases
on objectives without any supervision.
Case Analysis
Based on the Cressey’s Fraud Triangle, it seems that the Assistant Vice chancellor was influenced by the opportunity.
This is because he received the authority to buy objects that were up to $2,500 without any regulations or supervision. Thus, he took the advantage of committing fraudulent activity and assumed that he could get away with replacing the vendor invoices with false invoices from other suppliers. However, he got caught by the accounting department because the descriptions of the actual invoices were supposed to be consistent with the operations of the Communications Department and the false invoices did not
match.
The accounting Department performed well in detecting and preventing this fraud. However, they could have better conducted in ensuring the internal controls of the Institution segregated its Purchasing department task. This is important because segregation of duties is vital for the internal control system because each employee has to ensure in providing reliable basis of assessing the work of another employee.
Also, the computer program performed well in effectively raising a red flag for suspicious activity. For an example, the consistent payments made by Mr. Fairbanks to the same supplier with the false vendor name and addresses. However, this should have been detected by the computer program earlier because it could have helped in analyzing the high levels of information, organizing the data, and coming to a solid conclusion. In addition, employees need to be aware of other employee's fraudulent behavior and always share and report. Overall, the tools used in this case were successful and the invoices for the documents were key in helping to detect this fraud and abuse instigated by Mr. Fairbanks.
Conclusion
Companies need to establish adequate segregation of duties in order to have effective internal control models that can help reduce risk of errors and fraud. This is why implementing separate accounting functions, purchase approvals, and strong internal controls for each department and employees will help prevent fraudulent behavior.