Module Four: Short Paper Ashley Hutton ACC 421: Auditing and Forensic Accounting Richard Barrett September 24, 2023
2 Module Four: Short Paper The fraud cases that are chosen for this assignment are Case 7 and Case 9 from the book in Chapter 7 short cases. The object is to explain the rules for evidence for each case that is identified to be collected. The evidence will be explained how it is gathered and what steps to take and what will be collected first. The first case is Case 7 where there are fraud examiners investigating a local law firm for overbilling the clients and creating profile payments. The organization of the vulnerability chart is to make everything come to a head. The vulnerability chart is used to help develop knowledge based on the hypotheses that were determined and considers all aspects of the fraud that may be possible. The rules for the evidence in this case would be to remain objective, try not to arouse suspicion, and marking the evidence as it is found. Another rule would be to make a copy of the original evidence as to not make any changes while investigating. The fraud examiners would be looking at evidence from databases within the law firm in regard to payments made by clients and clientele lists and the rates that should be charged to clients for each service to determine if there is an overcharging and if the client is fake. The steps that would be used to investigate the evidence would be to check the employee list from the law firm to determine if there are any financial problems, perform a special audit to examine trends and changes with client payments coming in and out of the firm to each lawyer, interview the clients to see if any may have complaints about the charges, and then to interview the lawyers within the firm to determine whether there are suspicions from others or if they are involved. The first thing that the fraud examiners would collect would be information from employee records. The second case I chose to look at was Case 9 which involves the oil theft case that was discussed in Chapter 7 of the book where the manager suspected fraud and investigated also
3 observing and did not produce any evidence of fraud. The manager decided to enter a 30-day period of invigilation, which is an investigative method of close observation and supervision of suspected persons, where all fraud ceased. The week that was closely observed showed that two gas stations doubled their orders within that period. The invigilation was the right investigation method because it showed that there was a problem. The rules for the evidence in this case would be to use caution and be completely conspicuous about the supervision and to limit who is involved with the investigation. The evidence to investigate would be the orders from vendors, the financial database of payments and clientele records for any financial problems. This would