Forensic Accounting Case Study a. Samantha is a new employee in the organization, and the fact that she has to audit employees who have been working with the company since it began, it is important for her to exercise care and caution…
Thus, she should ensure that she does not raise any alarm when going through the examination. If anything, the group could decide to make the examination effortless, and impossible, by making sure that they sabotage any efforts she puts in the investigation. Subsequently, she should show readiness to work with them, regardless of her position in the firm. By making the examination, a form of normal routine would help her in eliminating any form of suspicion that could arise from among the rest of the workers involved in handling the cash. She should hold her suspicions about the under dealings taking place among the individuals and instead focus on the main reason for conducting the examination. There is a high likelihood that she will find discrepancies in the books, and as such, she should handle these with care not to raise too much noise. Working silently through the examination process, it would possible to unearth any possible cartel created among the employees to misapply the organizational funds. She can only reach at the bottom of the matter by maintaining a low profile investigation rather than creating a commotion by accusing different people on the missing cash. b. When conducting such an investigation, it is important to gather enough evidence to give her a good background on the issue. She should have adequate information on the amount of cash that has been missing from the organization. This is only possible by scrutinizing all organizational documents that deal with cash receivables in the organization. While doing this, she should try to establish any possible loopholes that the individuals use in order to misapply the cash. The books of accounts of the organization in the past five years or so would be the best starting point for the investigation. This would give her an idea of the amount of income that the organization used to receive then and the amount of revenues they received in the present time. This would help in identifying whether there was any pattern in the missing funds in the organization. It is however important to understand that the operating manager had convinced more clients into doing business with the organization, which meant that there should have been an increase for revenues. With the argument by George that he has had experienced poor economy against a prevailing good economy, it was evident that in the past, he had engaged in some form of irregularities when handling the organization funds. Thus, inspecting the inventory stock files would also reveal the amount of goods leaving the store at one particular time. These goods should tally with the amount of revenues recorded in the cash receivables. Moreover, records by the sales team would too be of value in establishing whether it was true that all the goods leaving the warehouse were sold. All these figures ought to tally. Pricing, though not an important factor, would too be an important record that would help her in the investigation. The pricing records would help in clearing the sales team’s files, making sure that the recorded amount tallied with the sales volumes made. c. Suspicions raised by chad of George are serious accusations, that if not properly investigated could affect the organizational performance or the working relations of the two individuals. It was thus Samantha’s duty to either clear George or prove that Chad’s accusations were true. However, she could not do this ...
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