Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Robert, the purchasing manager for Tim & Tammy's Treats, has been working there for 15 years. In that time, the company has grown significantly, and

image text in transcribed
Robert, the purchasing manager for Tim & Tammy's Treats, has been working there for 15 years. In that time, the company has grown significantly, and John is currently in charge of a purchasing budget of $15 million. Robert is paid a reasonable salary, but not excessive. Tim and Tammy Smith, the owners of the company, have recently taken huge bonuses due to the profitability of the company. Robert has not received any bonuses. Tim receives a phone call from Extreme Treats stating that they have not been doing the same amount of business in the last year. They think that John may be taking kickbacks from Extreme Treats' competitor, Treats R Us, in exchange for purchasing more from the competitor. You've been called in as a fraud investigator, to evaluate whether or not there is truth in Extreme Treats' accusations. Upon gathering evidence, you have found a number of things regarding the situation. Which of the following might you consider to be relevant facts indicating that Robert has been doing as he was accused by Extreme Treats? (Choose all that apply. If you choose an item which is not correct, it will be deducted from the correct choices you have made.) Robert has just bought a new Mercedes to replace his 10-year-old Ford Focus. The cost of goods sold in the last year went down 7%. Robert is the individual who approves all purchase contracts. Robert is married to the sister of the owner of Treats R Us. Robert recently had a swimming pool installed at his home. The company purchases about 14% of its inventory from Treats R Us, which only opened 3 years ago. In the past 3 years, Extreme Treats has dropped from supplying 45% of the inventory purchases to only supplying 8% of the inventory purchases

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Intermediate Accounting

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

10th Edition

324300980, 978-0324300987

More Books

Students also viewed these Accounting questions