a) Several internal control procedures were violated in this case due to the success of Adam Kimble. The following is a list of the violated procedures: separation of duties, bonding of employees, requirement of extended absence, pre-numbered documents, and performing evaluations of inventory and documentation at regular intervals. First, separation of duties between two or more individuals reduces the opportunities for either employee to defraud the company. It is difficult for two employees to join in collusion in order to get away with any fraud activity. Adam Kimble's duties were not separated as he was doing the buying and control agent work. Secondly, positions of trust and high importance within a business need to bond their employees. Bonding an employee means that insurance will protect the business from any dishonorable decisions made by this employee. The case does not get into enough detail on this, but it would seem that they had not bonded. Next, it is important to have employees take extended leaves of absence to possibly identify any questionable situations. Because Adam had not missed a day of work for over five years, the company had no way to notice any problems. Also, internal control procedures should keep account and pre-number documents. Purchase orders were not numbered and this made it much easier for Adam to hide the evidence and leave no one the wiser. Finally, regular checks and balances must be made on every employee and area of the business, no matter the success. The case made it seem that because Adam was working seamlessly and with profit everything was great. These failures in the internal control procedure allowed Adam Kimble to defraud the business.
b) All three components of the fraud triangle were present in this case: availability of an opportunity, existence of some form of pressure leading to an incentive, and