How do you plan to conduct the investigation

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Reference no: EM133496300

Question 1. Scout Company is a relatively small dry-cleaning operation that has a very steady level of business. Since the company hired a new employee, however, cash inflows have decreased, and the amount of promotional coupon redemptions have increased dramatically. The owner of the company has been very impressed with this new employee but has suspicions regarding her cashiering practices. When comparing cash sales to check and credit card sales, the owner noted that the coupon redemption rate was dramatically higher for cash sales. The owner does not want to wrongly accuse the employee if she is innocent but does want to find out if fraud is occurring. The owner calls you as an expert on fraud and asks you to recommend a reliable way of gathering evidence that could determine if fraud is occurring.

Please give your recommendations citing readings from the text, power point or other references.

Question 2. You are a fraud examiner who has been hired by Brady Company to carry out an investigation. Brady is a beverage company that has experienced increased shipments of beverages but no increase in revenue. Management suspects that inventory is being shipped to unknown places or is being stolen. You have decided to use invigilation to help you determine if inventory is being stolen or shipped to unknown locations.

Please list and discuss the invigilation steps/procedures you would use to uncover any possible fraud.

Question 3. While auditing a client, the CEO asks you to look carefully at cash flows. You notice that cash flows have decreased every year. Upon learning of your findings, the CEO remarks, "I seem to bring in more customers every year, but the cash is not there." You tell him that fraud may be occurring, and he asks you to investigate. The two of you agree that the most likely place for a fraud to be occurring is cash collections, and the CEO provides the names of three employees involved in the cash collection process.

How do you plan to conduct the investigation?

Question 4. Assume that you have selected a random sample of 15 checks from a population of 800 checks. The checks you have selected are the following numbers: 664, 789, 650, 136, 365, 538, 800, 657, 110, 136, 398, 645, 214, 544, and 777. You have determined that no fraud exists in the sample of 15 checks you evaluated.

Based on this sample of 15 randomly selected checks, can you conclude that no fraud exists in the population. Please explain your answer.

Reference no: EM133496300

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