Question

You have been hired to investigate possible fraud losses in Greenwor Manufacturing Company. Greenwor’s attorney contacted you in confidence and told you that she has had many tips indicating that Chad Wits, the CFO, is somehow stealing large sums of money from the company. Wits earns a good salary of $300,000 per year, but company employees report that he has recently purchased a $4 million house, a sail yacht worth at least $2 million, and one employee said that he spends his weekends in Las Vegas, where he loses very large sums of money on a regular basis. Some employees have seen him driving a new Maserati sports car near a local shopping mall, but he always arrives at work with a plain, aged family car.
Required
a) What steps would you take to conduct your investigation?
b) What information would you need to develop a fraud theory?
c) Does the information you currently have provide sufficient predication for an investigation?

Answer 1

a) The following are the steps taken Enquire about the internal controls in the organisation whether have or not. - What are the controls being held with CFO, Chad Wits? → Eravuire the transaccions being deal by the - chad wits » Enquire any sums being mis placed by him in previous organisations or some other times in the same organisation → EnDevelop a brief study of operations process going in the organisation. Then identify the weak areas that where the possibility of making fraud is possible. → Enquire that any misunderstandings or disturbances happend between the employees who complained and chad wits. Enquire about the behaviour and character nawith nedtieth other employees in the organisation Çamn Scanner: C

an With the available information, Chod wits cannot be declared as he is doing fraudluent things in the organisation because of following reasons He may be rich from his family ancestors as - his ancestors may be rich. He may other sources of income like his 1. family members also may be earning » The employees who have discrepancies (or) disturbances with the chadwits, may wanted to to dismiss him from the organisation. → More over, we cannot believe by the things being said in the organisation by the employers due to many reasons. Scanned with Cam Scanner