Fraud Theory

Do any of the facts presented represent adequate predication on which a fraud examination may commence?

* If so, what are they?

* If not, why not?

For the commencement of fraud examinations, following questions should be address and if some of the questions holds true than fraud examination may commence

* Who might be involved?

* What might have happened?

* Why might the allegation be true?

* Where are the possible concealment places or methods?

* When did this take place (past, present, or future)?

* How is the fraud being perpetrated?

In this case there are two facts that can raise the suspect and can commence a fraud examination

* The majority of the land was purchased from Krandall Development Ltd., which began to acquire property in the area when the airport was under consideration by the city council. Land prices paid to Krandall Development Ltd. for the acquisition of some of the parcels appeared to be higher than otheracquired parcels

* Once the real estate was acquired, an airport manager was hired and he in turn hired his staff. When appraisals were reviewed, it was noticed that all the comparables were interrelated. That is, the comparable for one parcel of ground was acquired by the airport authority in another transaction. There were no “outside” comparables

Are there enough facts as presented above to formulate a fraud theory? If so, what is your fraud theory?

This case is a preposition without many evidences and to solve a case with complete evidences, certainly needs the examiner to make some assumptions as there are no scientific evidences that postulates the observations and gives findings based on that. For this case, my fraud theory approach is

How would you increase your audit scope?

The audit scope can be increased by determining the following

* Nature of the evidence i.e. if the evidence is direct or circumstantial

* By identifying the potential witnesses

* By looking into the...