Jackson company manufacturers pet supplies for birds and cats. Its’s top-level staff includes two accountants, a technology coordinator, a production manager, a warehouse manager, an office manager, two sales managers, two assistants, and the CEO. The company’s main offices and manufacturing plant in Los Angeles consist of an office building, a plant building, and two small warehouses. All buildings are connected via underground fiber optic cable. The servers, hubs and routers are stored in the main office building.
The brain behind the IT network include three server machines, named Washington, Jefferson, and Adams. The Adams server hosts the Mixta accounting system, which processes all internal and external accounting transactions in real time.
A recent audit by a regional accounting firm discovered six customer accounts that could not be traced back to real people. The auditors confirmations had been returned in the mail, marked “Undeliverable” and with “Invalid Address” stamps. To make things worse, all six accounts had been written off for nonpayment of amounts ranging from $4,200 to $7,000. The discovery was a complete surprise to Sandra Winger, the credit manager, because she always reviewed and personally approved all write-offs over $2,500. She was sure that she had not approved any of these.
Sandra called in Tom Surefoot, a local forensic accountant to investigate. She was sure that fraud was involved, and she strongly suspected that Betty Blanco, one of the office managers had somehow gotten into the accounting system and set up the phony customer accounts and had probably sold off the written-off accounts on the gray market. Sandra was furious.
“I don’t care how much it cost,” Sandra told Tom. “I want you to catch that woman. I’m not going to let her get away with me like that.”
How could Tom apply computer forensic and other techniques to determine whether or not Betty Blanco should be a suspect? Case Question 41 Chapter 11 - Forensic Accounting and Fraud Examination 2nd Edition.