Tbc Case
Tallahassee Bean Counters
Forensic Investigation Report
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Executive Summary
An investigation of the financial performance and condition of Tallahassee Bean Counters (“TBC”) was conducted for the period May through September 2013 for the purpose of sharing with you any observations or areas that require additional consideration. This analysis was based on a limited understanding of the business and the control environment. Furthermore, many of the detailed testing procedures that generally would be performed as part of a complete forensic investigation have not been conducted due to my not having full access to all financial documents and records. Please contact me should you decide a more formal investigation is warranted based on the findings included in this analysis. Our findings include the following:
✓ The overall control environment has not been established to prevent, detect, or deter fraudulent activities including financial reporting;
✓ Ghost (fictitious) employees have been created and payments have been made to these fictitious employees;
✓ Revenues from ticket sales do not agree to supporting documentation;
✓ Bank deposit transactions are not properly verified;
✓ Inventory is subject to misappropriation.
Potential Suspects and Red Flags
Based on my review of personnel files, interviews with co-workers, spouses or former spouses, and prior employers, three individuals - Phil Ackers, Ben Hill, and Terri Hughes - have been identified as potential culprits of fraudulent activity. Below are the key factors that led to this determination.
Phil Ackers: As president of TBC, Mr. Ackers should be responsible for establishing the overall control environment of the organization. The “tone at the top” is one of the most critical factors to ensure that fraudulent activity is either prevented, detected, or deterred. However, there are no formal procedures whereby employees can report known or suspected
Forensic Investigation Report
[pic]
Executive Summary
An investigation of the financial performance and condition of Tallahassee Bean Counters (“TBC”) was conducted for the period May through September 2013 for the purpose of sharing with you any observations or areas that require additional consideration. This analysis was based on a limited understanding of the business and the control environment. Furthermore, many of the detailed testing procedures that generally would be performed as part of a complete forensic investigation have not been conducted due to my not having full access to all financial documents and records. Please contact me should you decide a more formal investigation is warranted based on the findings included in this analysis. Our findings include the following:
✓ The overall control environment has not been established to prevent, detect, or deter fraudulent activities including financial reporting;
✓ Ghost (fictitious) employees have been created and payments have been made to these fictitious employees;
✓ Revenues from ticket sales do not agree to supporting documentation;
✓ Bank deposit transactions are not properly verified;
✓ Inventory is subject to misappropriation.
Potential Suspects and Red Flags
Based on my review of personnel files, interviews with co-workers, spouses or former spouses, and prior employers, three individuals - Phil Ackers, Ben Hill, and Terri Hughes - have been identified as potential culprits of fraudulent activity. Below are the key factors that led to this determination.
Phil Ackers: As president of TBC, Mr. Ackers should be responsible for establishing the overall control environment of the organization. The “tone at the top” is one of the most critical factors to ensure that fraudulent activity is either prevented, detected, or deterred. However, there are no formal procedures whereby employees can report known or suspected