Reference no: EM131734072

You work at Tinker Co as an internal auditor. Tinker Co has received an anonymous tip phone in by an employee that another employee, Bob, is possibly embezzling money. Bob has worked at Tinker for 16 years and is a respected and admired employee. Bob has steadily worked his way up in the company with exemplary performance. Internal audits of Bob's department have always found it to have an exceptional control environment. Bob is also good friends with the CFO and CEO who trust Bob's honesty and abilities so much that he is being groomed to take over for the CFO upon his retirement. The anonymous tipster made several claims. First, there are large variations in some financial statement accounts. Along with these variations are unexplainable debits and credits which were entered by Bob. Next, Bob has been exhibiting erratic behavior. Bob is normally even tempted and jovial but he has been flying off the handle for no reason. Bob also refuses to allow anyone else to balance certain accounts claiming that only he can be trusted with them because they are so crucial. Lastly the tipster alleges that Bob, divorced, with full custody of his two children, lives a lifestyle well beyond what his salary can support. You know that investigating these claims against someone as well regarded as Bob will be disruptive to the company. Should you proceed with an investigation, you will need to do so carefully, especially since all you have is one anonymous tip and the person who made it could have ulterior motives.

Based upon the information above, how would you investigate this potential fraud?

Would one of the first things you would do be an interview with Bob to get more information about the situation?

Why or why not? What type of interview would you conduct with Bob and what would be the most effective way to approach it?