What are the three major categories of evidence?

Assignment – Evidence Collection

You have been assigned to the Emerel Company embezzlement case by the owner of your CPA firm. The president of Emerel Company has told you that Susan Smith, the assistant bookkeeper, reported the suspected fraud. Susan has been filling in for the head bookkeeper, Mary Chernet, while Mary has been on vacation for a couple of days. The president told you this is the first vacation that Mary has taken in three years. While reconciling the company’s bank statements, Susan has found discrepancies in payees on checks. Susan has found checks written to credit card companies (Emerel does not use credit cards) and large reimbursements to Mary Chenet.

To analyze this case of fraud, you first need to gather some evidence, to give you some background on the company and the fraud suspect, and also to prove the fraud and calculate the fraud loss for Emerel Company.

  1. What are the three major categories of evidence?
  2. From what sources would you obtain the evidence you need for this case?
  3. What evidence would you accumulate to prove this fraud and calculate the fraud loss? Explain this in a substantive manner.