Question

51. Gabriela Pearson is a professionally certified independent forensic accountant. She has more than 20 years of experience investigating fraud and has testified numerous times in both state and federal courts in both civil and criminal cases. She was recently hired by WindSand Hotels, a closely held corporation, to investigate a company pur- chasing officer who was suspected of taking kickbacks on purchases. Gabriela gave WindSand her standard engagement letter with the scope of the inves- tigation to be limited to investigating the one suspect. It promised no guaranteed findings or results. She deal directly with Sam Markoff, the company's controller, and Joanna Rodriguez the outside attorney. Gabriela was working under attorney-client privilege. At their first get-to-work meeting, Sam said, “We've had three different tips from our Web site about this. All three were short messages that simply said Tania Perez, our main purchasing agent, was taking kickbacks from our suppliers. One tip even named a particular supplier, the Whole Coast Seafood Supply, a company that supplied fresh and frozen seafood to our restaurants." Gabriela responded, "Any documentation that supports her involvement in this?" "Not yet," said Sam. "That's why we hired you. If she's selling us out under the table, it could be costing us a fortune." Joanna, the outside attorney, jumped into the conversation. "I've already talked to several employees about Tania Perez, and I'm convinced that she's guilty. I heard from one reli- able employee that one of your suppliers paid for her vacation on a Caribbean cruise ship. And there are rumors that she had bank accounts in the Cayman Islands and Brazil."

Answer 1

According to the situation stated above, Gabriela is forensic auditor appointed for investigating limited to one suspect only. This is because the hirer of forensic auditor has complete doubt over the frauds being committed by their main purchasing agent, but due to lack of evidence, cant take any step.  

As per the owner and controller beliefs that their main purchasing agent is getting under the table to earn benefits from their supplier.

a) In order to proceed with her Investigation, Forensic auditor cannot directly call for personal accounts or bank accounts, wealth statement from purchasing agent,

- Take third party confirmation : Forensic auditor can take help from supplier views that company is dealing with.

- Analyse the sale made by the supplier wholecoast, if instant increase in the sale and major share of sale is shared by Windstand company, then it is alarming situation.

- Take a look over the purchasing trend of windstand company increase in purchase from company who has offered kick back to the purchasing agent, whole coast supplier.

- Make comparision of the prices offered by the suppliers deal with the purchasing agent and the other suppliers in the market, to understand the positive attribute or benefit that will come from those company.

b) Talking to employees: It will give alert pop up to the purchasing agent to be very cautious at every step and plan accordingly.  

- Simply Bluffing over the action without any proof is bad idea and will be counter attack by the purchasing agent also.