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Case 1 The management of AAAA Company has observed that the company s cash outflows have been increas- ing much more rapidly than its inflows.

Case 1

The management of AAAA Company has observed

that the company

s cash outflows have been increas-

ing much more rapidly than its inflows. Management

cannot understand the chang

e; from its perspective, it

has been

business as usual.

Management has asked

you, a fraud expert, to help them understand what is

going on.

You have decided that the best place to start your

investigation is to take a sample of canceled checks and

verify that both the controller and another manager

signed them

a procedure required by company policy.

Check numbers for the period range from 100 to 800.

Using Table 8-1, follow the instructions below to

select a random sample of 15 checks to examine.

Start from the bottom left of the table.

Move through the table from left to right and from

bottom to top.

Skip the numbers outside the relevant range.

Use the middle three digits of each number

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