In a Las Vegas casino, an employee discovered a flaw in the accounting system. The accounts payable clerk discovered that they were able to change the names of vendors in the computer system to his name. As a result, the employee could create false invoices and then cut a check for the false invoice. The name on the check would be changed to the name of the employee. After the check was printed, the name in the system could then be changed back to the appropriate vendor. The check register would show only the name of the vendor. The fraudulent employee had authorization to sign checks under $1,000. By writing small checks, the employee was able to defraud the company of $10,000. The fraud was caught by accident when the employee of another department was looking through the vendor list on their computer after the fraudulent employee had changed the vendor name to their own name. A few entries later, the vendor name changed again. The investigating employee wondered how this could occur and asked their supervisor. Soon after, the fraudulent scheme was discovered.
What kind of fraud is being committed?
How could this fraud have been prevented?