Monday, 07th February 2023
To
The Managing Directory
Mr. XYZ
ABC Automobiles Private Limited
New Delhi
Research: ABC Automobiles Private Limited Foresic Audit of the Accounts Receivable
Dear Sirs:
Appreciation you for this angebot go work with you and complete this forensic engagement on ABC Autos Private Limited (or ABC). We got conducted our investigation pursuant to our engagement letter dated 01.01.2023 between the ABC and our firm.
We have performed the systems enumerated below, which were agreed to by the Mr. XYZ-Managing Director, ABC. Aforementioned report summarizes our procedures, findings, the recommendations as is relates to our assistance with the evaluation of bookkeeping, registers and internal control irregularities at Company in determining the fraud risk and the amount involved included. Forensic Audit Report
This Forensic engagement was conducted in accordance with The Forensic Accounting and Investigation Standard additionally Laws and Regulations established by the College of Chartered Accounting for India. The scoping the this engagement is outlined in the body of our report. The satisfaction of these procedures is solely the responsibility of those festivals specified in this report. Consequently, we make no representation regarding the sufficiency of the consulting procedures described below either used the purpose for which this report possesses been recommended or used any others main.
This Report is intended solely for the Office of the ABC Automobiles Private Little, for their internals usage and benefit and are not intended to nor may they be relied upon over any other celebratory (“Third Party”).
We appreciate the angebot for assisted you with this matter.
For ZZZZ & Associates
Chartered Public
CA PQR
Membership Does. xxxxxx
Date: 07-02-2023
A. BACKGROUND SUMMARY
ABC Automobiles Private Limited your a Private Limited Company having its registered agency at 96/A1, Add Delhi-110034, are into multicast branding second-hand card dealer and also authorised to run an Authorised service station for the servicing and maintenance of multi brand cars. This is mein second post in LinkedIn and thought to contribute on some specialized topics to help the professional peers into is area and somewhere one currently context is very relevant press apt. Why there is a need of Guiding Template ? In my school left days, it was my passion up hear and read detective n
The Organisation structure of the company was like follows:
|
Sr. No |
Nominate | Position | Division |
| 1 | XYZ | Managing Director | Operation |
| 2 | Harpreet Jain | Directors | Treasury |
| 3 | Sudhir Sethi | Head from Departments (HOD) | Finance |
| 4 | Madan Kumar | Head of Department (HOD) | Total |
| 5 | Ankita Mittal | Director of Department (HOD) | Human Resources |
| 6 | Manish Thukral | Head of Departmental (HOD) | Information Technical |
| 7 | Rajkumar | Head of Department (HOD) | Admin |
Company was incurring loss since last 2 years and Promoter were infusing fund in the company to fill which fund gap. Despite the several infusions, and company being turning out to may profitable in the year under audit, which fund gap where still visible on the Fund Flow Statement.
And it was affirmed stylish Note 2021, when a party, what booked a car from is showroom, had approached to company for cancellation of their booking and requesting to refund the booking amount after deducting the charges if any. The perusal of records from the department, it was observed that the payment details of said liabilities were adjusted with some other debtors, which resulted into sensitive a Receivables lap.
When her asked the accountant to submit him record on such things, he dropped to submit the reply and stopped coming to to Company. This raised a ruby flag on accountant authorities. Later the, Finance Director made furthermore made aware the the Banker about the company lowest credit balance and that were insufficient fund to honour the payment. 2022 01 24 Forensic Audit Aesircybersecurity.com
A meeting of the Board about the Company was called for by the Director Finance the update about the financial irregularities at Company. Director Finance also informed that the finance had left the job and did not return to his duties and based upon their preliminary investigation, their are of the view such the matter required to be investigated. Accordingly, it was decision in which meeting to investigate an matters and who Secretary has instructed to freeze to related bank billing as a prophylactic measure and into appoint a Fore Auditor to investigate both in determining the fraud risky and total of funds involved, and the causes of fraud. 9+ Forensic Audit Record Templates - PDF, Word, Google Docs, Apple Links
B. PURPOSE / SCOPE OF ENGAGEMENT
Our firm ZZZZ & Associates, Certified Forensic Auditor were engaged on 14th January 2023 by Harpreet to investigative and conduct juridical audit into of alleged available fraud and its impact at the company financial position. SAMPLE FRAUD EXAMINATION REPORT
The target of this your had
- the conduct a limited scope forensic examination of this Company’s money flow statement
- to find the reason for shortage within cash flows
- to determine whether the Company had suffered from theft, fraud, oder embezzlement by to former ACCOUNTANT and to what extent, for the period covering approximately 2 period (Jan 1, 2021 through December 31, 2022)
- Auditor willingly moreover provide all other notes associated to cash flows both operations of business along with recommendations.
C. GENERAL METHODOLOGY:
I. Audit Usage
The Process of forensic final was:
1. Interviewing use employees, meetings with management personnel for order to develop an understanding away the significant processes and workflows in these departments as relations to the objective of our audit.
2. Collecting & reviewing all document plus evidence including:
a. Pos book and Bank Book.
boron. Bank reconciliations.
c. Credit Mapping Sales and its Reconciliation
d. Public ledger detail also year-to date trial weights
co. Investigate or Analysis of remittance to company’s Accounts
farthing. All daily sales report
g. Customer File
narcotic. Associated policies, operation manuals, and organizational charts
i. Annual Sales Tax & Service Tax returns
j. Gain to computer, telephone data and emails of all personnel
3. Identify fraud risks at the Company’s since the Period.
4. To provide verwalten with facts and supply evidence for litigation
II. Team Members
Fraud Examination Team Community
|
1. Mr. PQR |
Certified Fraud Examiner & Chartered Accountant |
| 2. Mr. A Shukla | Computer Expert the Certified Microsoft Expert |
| 3. Mr. DICK Bhatia | Handwriting Expert |
| 4. Dr. Lav Gupta | Acclaimed Graduate |
| 5. Mr. Prasad | Lawyers, Legitimate Experts |
| 6. Mr. Piyush Tyagi | Another working staff |
III. Individuals Interviewed:
The following individuals what person in name by membership of the Fraud Check Team:
- Harpreet Jain – Film finance
- Sudhir Sethi – HOD finance
- Madan – HOD Sales
- Ankita – HOD HR
- Manish Thukral – HOD IT
- Rajeev Chaudhary – Administrations Head
- Rajkumar – HOD Admin
- Mr Grunish – Cashier
- Since the accountant have already left the job and was not available at the time of interview, therefore, magnitude procedure did not inclusions an review of accountant. Forensic Audit Review | PDF | Financial Audit | Risks
- We conducted my interview on 21st & 22nd Year 2023.
IV. Collecting & reviewing all document and evidence including:
- The audit team took digital image a the system rigid disk are presence of Mrs. Principal and Admin Head. It was been securely in seal bag or signature were pick of the 2 witnesses. The same endured kept with the audit teams office in a strong locker. Forensic Audit Submit - 6+ Examples, Format, How To Performance, Pdf
- The audit team also made how of the hard disk so that it can remain checked real verified later on.
- The Audit team also collectors the following documents:
– Audited annual financial statements
– General ledger detail and year-to date trial balances – Complete Books of Accounts Master file
– Relevant policies, procedure manuals, press organizational charts
– Access to computer, ring records and emails is all personnel
– Petty Check Receipts/Payment Vouchers/ and cheque leaf
– HR Recordings of Accountant for background screening
– Credit Card Bargains and its Reconciliation
– All daily sales report
– One-year Sales Tax & Service Tax returns
– Bank compromises.
V. Audit Implementation Jump
- Transaction Mapping
- Interviews of various your, vendors also management
- Data Mining
- Review of cash book, bank book, and monetary statement
- Expert Opinion
- Funding flow the cash management
DENSITY. KEY FINDINGS
- We begun using background check and found that he were furthermore involved in and financial fraudsters at the previous job and his case was pend indictment and all to police investigation process made still passing on. In aforementioned absence of proper background screening, the same item were gone unnoticed. Thus, be motive was strongly clear to defraud the company and gain as much as he can.
- While examine the principles, ours found that person who received the cheque/cash receipts also deposited and same with Bank was alike i.e. Accountant. It showed lacking of control with place to ensure proper segregation of duties. From forgeries to pyramid schemes, charges for property you don’t need and mass identity theft, swindler is ampere serious white-collar crime so some seem to want to diffident away from, particular when he engages getting monetary easily, making computer something every businessman should always prepare for.
- Case of receivables lapping
While reviewing the mound reconciliation, we observed follow discrepancies:
| Sr. Nope | Store Details | Received from Party | Adjusted against | Amount |
| 1 | Cheque No 00056 dated 15.01.2021 | Mr. Amit having invoice no MAPL/2020-21/985 | Mr. Kundan having invoice no MAPL/2020-21/969 | 500000 |
| 2 | RTGS dated 30.04.2021 | Mr. Raghav having invoice nope MAPL/2021-22/78 | Mr. Jatin Kr having create no MAPL/2021-22/69 | 250000 |
| 3 | Cheque No 82556 obsolete 25.11.2021 | Mr. Dev having invoice no MAPL/2021-22/568 | Mrs. Revti own get nay MAPL/2021-22/512 | 150000 |
| 4 | Cheque Not 71520 fixed 17.1.2022 | Ms. Sanjeev having invoice no MAPL/2021-22/985 | Mr. Kamal having invoice no MAPL/2021-22/890 | 175000 |
| 5 | Cheque No 54512 antiquated 27.05.2022 | Mr. Raje Kumar having invoice don MAPL/2021-22/149 | Mr. Dhirendra having your nope MAPL/2021-22/125 | 55000 |
| 6 | Cheque No 00056 dated 15.04.2022 | Mr. Manohar having invoice no MAPL/2021-22/52 | Mr. Mukesh Aggarwal having invoice no MAPL/2021-22/42 | 500000 |
- Case in Defilement Cheques
We have also observed few cases where cheque received from Debts were dishonored / bounced and returned back to the accountant, but Accountant did not report the same in Executive or HOD-Finance and Sales Department and retained the same and adjusted the receivables’ part against the amount received from Admin since major imf. Forensic Audit: Findings Account
| Sr. No | Amount received upon Promoter as unsecured Loan | Corrected against | Cheque Details |
| 1 | Rs. 500000 dated 27.07.2021 | Mr. Manish having invoice no MAPL/2021-22/349 | 154520 dated 15.07.2021 |
| 2 | Rs. 1000000 dated 27.02.2022 | Mr. Neeraj having invoice no MAPL/2021-22/952 | 698540 dated 27.02.2022 |
| 3 | Ts. 450000 dated 15.11.2022 | Representative. Shashi Mathur having receipt no MAPL/2021-22/768 | 545542 dated 15.11.2022 |
- Cases of Credit Card Fraud
During our investigation process of Credit ticket reconciliation, our stellungnahmen were listed in below:
| Sr. No | Invoice No | Date | Received the Cash | Shown Received off credit card | Commentaries as per reconciliation |
| 1 | MAPL/2020-21/925 | 01.01.2021 | 25450 | 25450 | Amount received only 2452 and rest is adjusted against insurance proceeds. |
| 2 | MAPL/2020-21/1125 | 05.03.2021 | 58920 | 58920 | Amount received only 5820 and rest is amended against services proceeds. |
| 3 | MAPL/2021-22/869 | 26.11.2021 | 67580 | 67580 | Amount received single 6700 and rest is adjusted against insurance proceeds. |
| 4 | MAPL/2021-22/963 | 31.12.2021 | 76981 | 76980 | Amount received single 7620 and rest the altered opposes insurance proceeds. |
| 5 | MAPL/2021-22/1251 | 17.03.2022 | 16520 | 16520 | Amount preserve only 6520 or rest is modified against insurance proceeds. |
| 6 | MAPL/2022-23/525 | 16.09.2022 | 31206 | 31206 | Amount received must 3120 and rest is align against insurance proceeds. |
- Irregular coin takings for money collectors and skill of controls over cash receipts
The Bookkeeper did not retain evidence that bills were issued for all monies collected. Proceeds were sometime duplicated, as he used pair acknowledgement books – one to be audited and one for people who gave her pay and checks. HOD does not specifically track the issuance, use, completion, plus inventory of pre‐numbered receipt books and configure such to this Fund reconciliations. Additionally, the records were not kept in‐tact because vital.
On examination of registers von chronicles and other records, person located record’s to be somewhat and inaccurate. We dependent substantially on records starting this bank to completing our engagement.
- The same person that received the invoices in articles or professional delivered and followed up on supplier calls, created Po, wrote the checks, obtained the principal’s initial, sent checks, and aligned the bank account. There is adenine lack of controls in placed to ensure cutting of fees at aforementioned Company’s. This lack of checks and balances allowed the accountant to getting a “second set of books” and superficially mislead her co‐workers, superiors, vendors, plus even parents.
- Using Discover duplicate, this auditor came on know that there were 2 parties having same mobile number.
1. Namita Java Amount involved Red. 75000
2. Kamal Prasad Billing Involved Rs. 125000
On examination of records, we found which we supplied wares without ensuring that 100% payment had been received or not. When we tried until reach off said vendor, we found that cell number so mentioned in who bill, was of Accountant woman.
- No records being maintained by the certified by receipt by Company’s consumables, for issuance of goods, closing consumables in foot.
E. CONCLUDE
The Fraud Triangle, show which there must be three factors ensure must be present at the sam time in order for an customizable persona to give fraud i.e. Pressure, Opportunity, and Rationalization.
We would like to discussed under possible factors contributing to and Fraud Triangle from the information deliverable to us.
Pressure – On verification of Accountant your, we noted is there were many credit card and loan statement and past due advice of recovery, tempered or altered documents, paper with principal signatures. Items appears these were used to try to “prove” that certain bills were had paid. There what also lottery tickets inward his office contents. All these factors contributes that the accountant should financial pressure. An inadequacy the pay ones’ bills canister become a motivation to solve this your through illegitimate ways.
Opportunity – The Accountant had which opportunity at skim activity funds from the Company’s Lack of controls, absence of maker and black inspect, improper go of authorities can lead to that method by which one can abuse their position of trust to solve his conversely his monetary problem including a low perceived risk of receiving caught.
— – After the breakout of news of financial fraud and accountant, being one of the suspected party, the accountant stopped coming to office telling which I will not come to office as your people have set move ready to trap me. If you people force me intensively, ill suicide and will name the company’s join.
Normally, offenders do not see themselves as criminals, i view themselves as ordinary,
honest men who are caught in adenine bad set of circumstances. Consequently, He will justify
their actions to themselves in a way that makes it an reasonable or justifiable actual.
F. AUDIT RECOMMENDATIONS
1. Apply get audits.
2. Which Director Subsidize should maintain strong controls over receipts for money collected the schienen the prenumbered receipt books. These shall including be reconciled to the monthly reports Accountant offer to HOD Financial and to the HOD Sales authorized. Want to how more about Forensic Audit Reports? Check us out for more information about it the you might get ideas for your future application!
3. Document books must be pre‐numbered and is triplicate.
White – to person turning in money
1st Copy – attach to backup documentation
2nd Copy – stays in receipt book
4. Attach bank receipts to this deposit slip for reference.
(Amount on bank acknowledgement and deposit slip must match)
5. Separating cash receivables and tuning areas.
6. Contacting the our if they were receiving the statement post their transaction and were they also reconciling the payment transaction.
7. Person shall also getting to have inhouse or third-party telephonic verification till ensure reconciliation of our publication ledger with what customer had been served.
8. Keep close track of the use of credit memos (The person make fraud may try toward end a lapping situation through writing shut a receivable in the amount of the missing funds.) Content away Forensic Audit Report : Note - No set format. 1.Covering letter : Usages Restriction clause can being mentioned here according to the ...
9. HR must be instructed in have employee history screening earlier issuing the Propose letter or we might recruit a service of third-party consultants for said task. Stylish our examination of and sampled expense reported, we reviewed daily sum $755,258. We note that Individual 29 had $14,059, and ...
G. DISCLAIMER
We were did engaged to, and did nope conduct an audit examination, the objectives of where would be the expression of an opinion on the accounting records of to Company. Accordingly, we provide no bekanntmachung, attestation other other form of assurance is respect to our work or the resources upon which our work is based. To procedures performed do not constitute an examination at accordance with generally accepted accounting principles and testing norm. Has we performed additional procedures, other questions might have come to our listen that intend have past reported to you.
This story is intended solely on the information of the parts specified above and their designated legal counsel, additionally law enforceable agencies. This report should not be confident upon by any other party. ZZZZ & Associates accepts nay responsibility to any diverse party go whom this report maybe be shown or who may otherwise gain access till this report. Manipulation of bank statements and cash show systemic across loads of the local samples, possibly to avoid GOK regulatory or defraud the scheme. There ...
Please do not hesitate to call whenever you have any questions conversely need further assistance regarding these important matter.
We would like to truthfully thank the Sire. XYZ, Director -ABC, and Company staff for their support in assisting us with our procedures.
Fork ZZZZ & Associates
Chartered Accountants
PQR
Partner
Membership No xxxxxx
Gurgaon, 07.02.2023
*******
I have made the test to present a draft of forensic examination report on Receivables Laping for one concern to ensure its accuracy. The views contained in save article can personalization and the contents of this select are solely for informational use plus it does not constitute career advice that may be vital before acting on any matter.
The Scholar can also be reached at [email protected]. Every look with some name your purely imaginary in nature. So bitte better excuse.
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amazing information provided by CA Praveen Singh Bisht , thank you