ABC Company is a relatively small dry-cleaning operation that has a very steady level of business. Since the company hired a new employee, however, cash inflows have decreased and the amount of promotional coupon redemptions have increased dramatically. The owner of the company has been very impressed with this new employee, but has suspicions regarding her cashiering practices. When comparing cash sales to check and credit card sales, the owner noted that the coupon redemption rate was dramatically higher for cash sales. The owner does not want to wrongly accuse the employee if she is innocent, but does want to find out if fraud is occurring. The owner calls you as an expert on fraud and asks you to recommend a reliable way of gathering evidence that could determine if fraud is occurring. What are some possible investigative methods you could suggest?

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10-10-2019
Business

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ABC Company is a relatively small dry-cleaning operation that has a very steady level of business. Since the company hired a new employee, however, cash inflows have decreased and the amount of promotional coupon redemptions have increased dramatically. The owner of the company has been very impressed with this new employee, but has suspicions regarding her cashiering practices. When comparing cash sales to check and credit card sales, the owner noted that the coupon redemption rate was dramatically higher for cash sales. The owner does not want to wrongly accuse the employee if she is innocent, but does want to find out if fraud is occurring. The owner calls you as an expert on fraud and asks you to recommend a reliable way of gathering evidence that could determine if fraud is occurring. What are some possible investigative methods you could suggest?

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karinau karinau · Answer 1 · 2019-10-15T01:25:14+02:00

Answer: ABC Company is a relatively small dry-cleaning operation that has a very steady level of business.

Since the company hired a new employee, however, cash inflows have decreased and the amount of promotional coupon redemptions have increased dramatically.

Some possible investigative methods of fraud that i could suggest are :

OBSERVATION OF SUSPICIOUS BEHAVIOR

EXISTENCE OF ANONYMOUS COMPLAINT LINES

INTERNAL EFFECTIVE ADMINISTRATION AND INTERNAL AUDITS

HAVE A PROACTIVE BEHAVIOR AT ALL TIMES ( BE ALERT)

Explanation: This kind of situation is not confortable for the new employee , partners or the owner , that is why we must find the best solution for everyone to feel the less uncomfortable possible to afford it .

One of the first points is to observe closely the behavior of our new employee but if that is not enough is always good to go to those who witness or suspect they have witnessed a fraud .This can help to quickly detect a sensitive criminal situation , but we must continue gathering more evidence.

Also is important to have others channels for those witnesses that feels uncomfortable exposing a partner .No one wants to be the one to accuse the other. The existence of an anonymous form of complaint can be an excellent alternative, this is usually a telephone number .

Other point will be to have internal audits . Even if someone of administration is making the accounts is always good for some director check on the results to see if there is any strange behavior , the fact that any boss will be checking the chores and results always make the possible fraud harder .

The existence of documents that cannot be located can be an indication, a true "red spotlight" , that is why we should always be alert and proactive to any strange problem. From time to time, director can randomly request documents from their subordinates to see if there is any rejection or discomfort with the chore .

For evidence we must document date and facts (audits, electronic reports, signings, use of computer tools, witnesses...).also make an analysis of the economic aspects (damage, benefit and savings )and try to change the position and chores of the suspect for a few weeks to see if the problem keeps the same or changes .