Anait Artununian is the accounts payable clerk for Jiffy Delivery Service. This company runs 10 branches in the San Diego area. The company pays for a variety of expenses. Anait writes the checks for each of the vendors and the controller signs the checks. Anait has decided she needs a raise and the controller has told her to wait for six months. Anait has devised a plan to get a raise on her own. She creates a new vendor for her friend’s business with the name Gevok Car Detailing. She also creates two purchase orders for car detailing service from Gevok’s for $75 and $70. She writes checks to Gevok Car Detailing to pay these invoices. She knows the controller will sign all checks only looking at the checks over $100. She delivers the checks to Gevok who will deposit the checks in his bank account. Gevok then writes a check to her for $145. Is this a good way for Anait to obtain a raise? Is it an ethical practice? Eventually what will be the effect of Anait’s actions? What can the company do to prevent this type of behavior?
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