ABOUT

This sample hypothetical fraud examination report presents the comprehensive fraud examination of an actual case of employee theft and fraud scheme while employed as an office manager of a law firm. The audit uncovered irregularities in Robertson’s self approved invoices and submitted expenses account and personal expenditures charged to the company's Bank of America Purchasing Card. The hypothetical fraud examination team meticulously reviewed company records, invoices, and financial documents. Robertson, who served as the office operations manager from February 2017 to November 2018, was found to have embezzled approximately $425,000. His fraudulent actions included personal purchases disguised as business expenses and elaborate cover-up tactics involving altered invoices and false accounting entries. Despite unsuccessful attempts to interview him, Robertson was terminated, leading to a referral for criminal prosecution. The investigation revealed extensive misuse of the purchasing card for personal gains, including money transfers, clothing, home furnishings, and groceries. The deception extended to altering financial records and exploiting loopholes in internal controls. The subsequent criminal case resulted in Robertson's arrest, conviction, and a prison sentence, with a forfeiture order for the embezzled amount. The report underscores the need for stringent internal controls and robust background checks to deter such fraudulent activities. It recommends implementing pre-authorization and real-time notifications for expenditures, alongside a full assessment of existing controls. The case exemplifies the critical importance of vigilant financial oversight and proactive fraud detection measures in corporate settings. Originally submitted in academia and now used as a work product sample. Intellectual property of Brian Erbis and Brian Erbis Consulting LLC.