Procedures in Collecting Forensic Evidence

The purpose of this paper is to find and explain the irregularities on the Apollo Shoes, Inc case. In addition, to explain the procedures use to collect evidence, the sampling tools use in the sources examination and what are the analytical and inferential tools to evaluate accounting evidence.

Irregularities found in Apollo Shoes, Inc case

The following irregularities were found in the Apollo Shoes, Inc. financial documentation:

• The minutes of the audit committee, dated on October 18, 2011 the V.P. of Finance, Mr. Unum stated that previous auditor unexpectedly withdraw from the engagement and also refuse to let the new auditors to contact them. Further in the documentation states that there is the possibility of a legal action and that the auditors decide to withdraw due to “incongruent goals” (Lowers, Manktelow & Reynolds, 2009). It seems suspicious that the company didn’t allow the new auditors to contact the previous auditors.

• On the notes of the financial statements under related party transactions the company on February 1, 2010 purchased its operating facilities and equipment from a company controlled by two previous directors and shareholders in the amount of $623,905 and they leased a second facilities paying $200,000 a month. Since the two directors are not longer associated with Apollo Shoes, this related party transaction should be further investigated (Lowers, Manktelow & Reynolds, 2009).

• On the minute of June 30, 2011, Mr. Unum asked that Apollo advance 1,000,000 to Mr. Lancaster personal secretary as a personal loan to cover legal matters related with his previous employer. The loan is subject to 1% interest due on June 30, 2048. It is suspicious that he want to record the loan other receivables instead of employee advance and in addition, that Mr. Lancaster requested to have the check drawn to him after the conclusion of the meeting, that he would cash it and give to his secretary (Lowers, Manktelow & Reynolds, 2009). It seems fraudulent...