Description: Internal control is important in preventing and detecting fraud and theft. The Royal Canadian Mint found out recently that metal detectors were not sufficient to prevent or detect an employee from stealing over $150,000 in gold by hiding it in a body cavity. Lawyer Gary Barnes noted that controls over the precious metals were surprisingly weak, indicating that “they had pails of gold just sitting around and people could walk by and actually just pick things out of them.”
Date: February 2, 2017;
1) Were you surprised by the ease with which this employee was able to smuggle out the gold?
2) Wiley’s Auditing: A Practical Approach discusses the so-called Fraud Triangle. After reading this story, can you see how one or more elements of the fraud triangle may have been in play?
3) What controls might you recommend to help improve security at the Mint? Hint: Check out Chapter Seven of Wiley’s Financial Accounting: Tools for Business Decision Making.