A purchasing manager for Weibo Hardware Berhad has sole discretion in selecting vendors for the parts and supplies sold by the company. The manager directs a disproportionate number of purchase orders to a supply company owned by the manager’s brother in law which charges above market prices for its products. The manager’s relationship with the vendor is unknown to his employer.
REQUIRED:
(a) Explain the type of fraud in the situation above.
(3 Marks)
(b) Discuss the control procedures that can be implemented to prevent the fraud.
