Question

Jonathan Simpson owns a construction company. One day a subcontractor calls him, saying that he needs a replacement check for the job he completed at 1437 West Maple Avenue. Jonathan looks up the job on his accounting program and agrees to reissue the check for $12,750. The subcontractor says that the original check was for only $10,750. Jonathan looks around the office but can’t find the company checkbook or ledger. Jonathan calls you to investigate. How would you proceed? Write a one-page report detailing the steps Jonathan needs to take to gather the necessary evidence and protect his company.

Answer 1

Solution for the problem is provided below, please comment if any doubts:

Description of the case:

The company owner Jonathan finds that there is an abnormality in the accounting details of a payment that is reviewed recently. A $12,750 payment was happened from the company but the beneficiary received only $10,750. That is a clear missing of $2000 from the company accounts. The company check book or ledger is missing thus no cross checking is possible as of now. The investigator needs to gather the evidence and needs to suggest the ways to protect the company from further fraudulent activities.

To gather necessary evidences against the suspected employees and to check whether other mismatches are there:

• Immediately tell the owner to suspend all the privileges of the suspected employees in the company accounting system and networking system.
• Check the activity log of the suspected employees in the specified period and identify the activities that looks abnormal.
• The starting period of the log check can be from the time where there is a mismatch in activity occurs.
• Check the company activities and find the time at which the payment has taken place and to which account the money has been transferred.
• The transferred account should not be the sub-contractor account since he claimed with proof of what he got.
• Now the suspected employees account details are checked and now it is possible to identify the employee that perform the fraud activity and steal money from company account.

Suggestion to secure the company:

• The problem happened since the absence of cross match of the money requested or get by the sub-contractor and money paid from the company.
• A centralized payment and account management system with the owner as the head who need to authorize every transaction will make the transactions secure.
• Now no extra money can be transferred since the owner verifies from the both directions.
• Also the access privileges to various employees in the company also helps to improve the security.