Detecting Fraud Case Summary

Debits always balanced credits prior to closing, and after books were closed, assets were in balance with the total of liabilities and equity accounts. The aging receivables balance was in balance with each individual customer balances. But, the auditor could have used different other techniques to detect a possible fraud. Had he chosen to follow the active approach he would have seen many red flags.
Since auditor was familiar with the company and understood how business was run, he could have talked to lower level employees. By talking to the old surveyor, he would have been aware of the surveying head department new house and car. He would have also known of the customer’s numerous complaints toward the surveying head department. With a new surveying …show more content…
Using the conversion method of detecting fraud is the most effective method in this particular case. Given the information about the surveying head department newest assets such as the house and the car, prompted the investigator to focus on the life changes of the perpetrator. More specifically, in payment of any possible liabilities, a possible increase on the assets, spending patterns and more importantly, the net worth method.
• A search for its social security number from the Social Security Administration helped the investigator gather more information from Department of Motor Vehicles (DMV) on perpetrator’s past such as address of birth and driver’s license.
• Getting the address of birth from DMV helped the auditor search into local records such as County Land Office and Tax Assessor’s Office.
• A further search in the Tax Assessor’s Office, showed another house bought by the perpetrator in his home town, owned by him and his childhood