Use the Net Worth Method to identify potential income from unknown sources in this situation for BOTH 2003 and 2004:

You receive an anonymous tip that your controller is embezzling assets from your company. You begin your investigation by interviewing several employees in the accounting department, who report no unusual behavior or sudden changes in the suspects standard of living. One interviewee does report that the controller has gone on a number of extravagant vacations.

You perform a net worth analysis, based on a search of public records, and find the following information:

2002 2003 2004

Assets

Personal residence 100,000 100,000 100,000

Automobiles 20,000 40,000 90,000

Stocks and bonds 30,000 30,000 30,000

Boat 30,000 30,000

Certificates of deposit 25,000 31,000 60,000

Liabilities

Mortgage balance 90,000 40,000

Auto loan 10,000 5,000

Income

Salary 37,000 45,000 51,000

Other 4,000 4,000 4,000

Expenses

Mortgage payments 6,000 6,000 6,000

Auto loan payments 2,000 2,500 2,500

Other living expenses 15,000 15,000 20,000