You are an internal auditor at Dunder Company. An employee of Dunder has phoned in an anonymous tip that a fellow worker, Jane, might be embezzling money. Jane has been a trusted employee of the company for 13 years; she quickly moved through the ranks of the company to become vice president over treasury because of her exemplary record. Your internal audit team has conducted thorough audits of her department for years and found its control environment to be exceptional. In addition, she is a good friend of the CEO and CFO. They have tremendous confidence in her abilities and honesty, and she is being groomed to succeed the current CFO when he retires.

The person making the anonymous tip claims to have noticed large fluctuations in certain financial statement accounts. Accompanying these fluctuations are unexplainable debits and credits that were all entered by Jane. The person also alleges that Janes behavior has been erratic. She is usually kind and patient, but recently, she has flown off the handle for no explainable reason. She insists on balancing certain accounts herself because she claims that they are too critical to trust with anyone else. Finally, the informant believes that Janes lifestyle as a single mother is well above what her salary can support.

Investigating allegations against such a trusted person in the company will cause considerable disruption. If you investigate, you will have to proceed very carefully, especially since you have only the word of one employee who could have ulterior motives.

1. Which of the following steps would you take to investigate Jane's embezzlement? (Select all correct answers.)

   		Obtain the CEOs and legal counsels permissions for your investigation.
   		Check personnel records and company records to gather information about Jane.
   		Examine financial statement accounts to verify that there is erratic activity.
   		During hours when no one is at work, examine debit and credit documents to ascertain their purpose.
   		Interview Janes coworkers and subordinates.
   		Gather public information about Janes spending habits and perform a net worth analysis.
   		Install keystroke logging software on Jane's work computer.
   		Interview Jane's neighbors about her lifestyle and spending habits.
   		Hire a private investigator to log and report on Jane's "off-hours" activities.
   		interview Jane, especially if you have sufficient evidence to confront her and obtain a confession.

2.

Why might you NOT interview Jane as soon as possible? (Select all correct answers.)

		You would not want to alert Jane to the fact that you are investigating because in the event that she is guilty you would not want her to have a chance to conceal the embezzlement.
		You would want to discover who the "anonymous" whistleblower is before taking any action.
		In order to eventually seek a confession from Jane, you would want to have as much evidence as possible to convince her that she cannot hide her fraud any longer.

3. How would you conduct Jane's admission-seeking interview in order to be most effective? (A thorough answer to this question will require at least five or six sentences.)