Case study 1 clearly was a case in which fraudulent activity had clearly taken place. If it was not for the internal audit conducted by the ABC company, Hank Duckworth would probably still be getting away embezzlement.
The clues that led up to Hanks demise was that Jane discovered that some of the accounts payable checks lacked complete endorsement by the payees. When Jane dug a little deeper she found five more checks made out to different people but all of the endorsement’s had the same handwriting. This also looks suspicious but as Gus told Jane, “They do look similar, but a lot of people have similar handwriting” (Albrecht, Albrecht, Albrecht, & Zimbleman, 2012). So even though Jane and Gus are pretty sure that there is fraudulent activity going on, they will have a hard time proving it with just the similar handwriting. The clue that gave them some solid evidence to go further with the investigation is that they discovered that all the checks where cashed at the same convenience store just down the road, and one of the payees listed on one of the checks was over 200 miles away. Other clues that caused Jane to suspect that fraud is involved was that there was no supporting documentation to go along with the checks and when she compared checks that did have supporting documentation made out to the same payee’s, the endorsement looked nothing like the endorsements of the suspected fraudulent checks. Once Jane and Gus had enough evidence to go after Hank Duckworth, he confessed to committing fraud and was punished by the court system.
This case study shows us why it is important to follow up on even the smallest inconsistencies. If Jane would have never given Gus a written statement expressing concern over the accounts payable checks, they probably would not have caught on to Duckworth’s scheme. It all started because someone noticed that some checks were not properly endorsed, which usually is not a huge problem in most cases, but by doing a little...
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