Launa Neta is a CPA, Certified Fraud Examiner, and the internal auditor for Remco Produce Distribution Company. A confidential tip from an employee in the central warehouse who serves the U. S. east coast has been referred to her. The tip was submitted through the company’s Web site. It reads as follows: Something very strange is going on with two of the workers here in the warehouse. These guys are sup-posed to be working for $ 10 per hour, but both of them have recently purchased brand new Mercedes convertibles, and I saw one of them the other night at the high- stakes poker table when I was in Atlantic City. I don’t know what they are up to, but I bet they are somehow robbing the company.

Should this tip be investigated? What additional information, if any, should be used as a basis for the decision as to whether to investigate?
Formulate at least one fraud theory applicable to the reported tip.
What evidence would be needed to test your fraud theory?

  • CreatedFebruary 26, 2015
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