Question

Upon entering the office one morning you receive an email that provides the following information:

The fraud detection committee has received information that a potential unethical or illegal action has taken place at our retail facility in New York. This potential issue was flagged by a current employee of this entity, although little direct, detailed information has been provided. Please review this situation and provide a recommendation to the committee as to whether this potential issue should be investigated further.

Based on the information provided in Module 6 regarding how to determine whether to investigate, please provide a detailed plan of how you would proceed.

Answer 1

As per the SAS 99 due to fraud:

A. Check with relationship and make the List of parties who are mingled with it.

B. review the potential risks

C. Research on the client

D. interest to maintain legal compliance.

E. speaking with client about the fees,

F. Try to get the engagement letter (client, scope, legal matters)

G. Asking about Site, location, contacts, skills required for the investigation

H. verifying how long was the problem existed

I. Examine internal control: Whether they are Ineffective, over-ridden by higher authorities.

J. Don't try to check with low employee morale, motivation, job satisfaction levels.

K. Examine about whether Unusual transactions are taken place

L. Check any corporate cultural issue caused for unethical issue.