While auditing the accounts payable of a large clothing manufacturer, you discover that four of the company’s vendors have checks sent to a post office (PO) box. After further investigation, you discover that one box is registered under the same name as the CFO’s son, and another is registered under the same name as his daughter—aged 3 and 5, respectively. Finding this highly suspicious, you begin questioning the employees who work directly with the CFO to determine if fraud is occurring in this case. After searching through the documentation of vendor transactions, the investigation leads you to suspect that the CFO is sending checks to the PO box of fictitious vendors to be collected and then deposited in his own account.
Over two weeks, you and your engagement team compile a large body of evidence implicating the CFO in the fraud. After this evidence has been gathered, you ask him to come to your office for questioning. Upon his arrival, and without wasting any time, you present all the evidence against him and ask him about his involvement in stealing money from the company. The responses you receive are defensive and antagonistic. The CFO says that he has heard that you and your engagement team have been “snooping” around the office, protests his innocence, and threatens to file suit against you for slander and libel if you pursue this absurd investigation that is trying to label him a criminal. Not expecting this reaction, and being frustrated that the interview is not going as you intended, you say that you have had enough for one day and cut the interview short.
1. What steps need to be taken before interviewing a person you suspect of committing fraud in a company?
2. What are some effective methods that could have helped in dealing with an interview subject from whom you are seeking an admission?