IDEA Case Study/Group Project Guidelines

IDEA Case Study/Group Project Guidelines

IDEA Group Project Guidelines

Fraud Investigation and Comprehensive Report

Overview:  You have been hired by Bright IDEAs, Inc. to perform an accounting review and fraud investigation.  Mr. Curt Cuthbert, CFO, has engaged you and your company for three primary purposes:

Identify and make recommendations on improving internal controls, particularly in Accounts Receivable,

Investigate potential fraud and,

Identify obsolete stock and make recommendations on the calculation of inventory provisions

Mr. Eric Bright is the CEO of Bright IDEAS, Inc.  Your assignment is to perform the analysis and investigation using IDEA Data Analysis Software.  The steps for the analysis and investigation are included in the IDEA workbook.  This workbook will walk you through the data analysis step-by-step.

The next step, and the heart of the project, is to produce a report for Mr. Cuthbert, Mr. Bright, and the board of directors of Bright IDEAS, Inc.  Your report should include the following:

Background of the engagement

for:

Accounts Receivable Review

Final thought – While you are to use data and results from the data files and IDEA workbook exercises as the basis of your investigation and report, all details are not provided.  You have the opportunity to make this a fun and valuable exercise by using your creativity to weave a story around the data you have.  Feel free to use your imagination to fill in gaps or to create a story for your report

Detailed Findings

Accounts Payable Review and Fraud InvestigationInventory Analysis

Conclusions and Recommendations

Accounts Receivable Audit
Provided by Audimation Services, Inc. &
the IDEA Academic Partnership Program
IDEA Version 11
Introduction: Accounts Receivable
• Dynamic Accountant’s year-end audit of Bright IDEAs Inc.
• Objectives: Improve the quality of the audit, improve efficiency, provide value added services
• Main Objective: To form an opinion on the validity of the debt
• Items of Concern: Old invoices, unmatched cash, and large balances where customers are in
difficulty.
New Project Folder
1.
After starting IDEA, you can create your project with the following procedure:
2.
On the Home tab, in the Projects group, click New.
3.
When the New Project dialog box appears, type the name Accounts Receivable Audit in the
Managed project section next to Project name and click OK.
4.
The newly created project will remain active until the Project Folder is changed.
New Project Folder
5.
From the Home tab, in the Projects group, click Properties. The Project Properties dialog box appears.
6.
Enter the following:
– Report name: Accounts Receivable Audit
– Report period: Jan 1, 2015 to Dec 31, 2015
The project properties will be stored in a file called Client.inf in the Project Folder.
Copying the Data Files
• IDEA organizes your work through Managed Projects.
• Copy the data files included in the IDEA Workbook download into the Source Files folder in the
Library for this project.
– ACC_REC2015.accdb – Accounts Receivable at March 31, 2015
– CUSTOMER.TXT – Customers Report in Text Format
• Copy and paste, or drag and drop into the Source Files subfolder within the Accounts Receivable
project folder.
Copying the Data Files
•
Add the needed data files to the Source Files folder in
the Library prior to importing. To achieve this, rightclick on the Source Files and click Add File.
•
Browse to the files included with the IDEA Workbook
and add:
– ACC_REC2015.accdb – Accounts Receivable at March 31, 2015
– CUSTOMER.TXT – Customers Report in Text Format
•
To import the files for testing, access the Import
Assistant by clicking Import button in the Source Data
group of the Home tab.
•
The Import Assistant guides you through the process
of importing the data.
Importing the Data Files – Microsoft Access
1.
To import ACC_REC2015.accdb, select Microsoft Access
and click Browse button to select the file from the
Source Files.
2.
Click Open on the Select File dialog box.
3.
Click Next.
4.
Once the data file has been selected, the Import
Assistant will try to determine the details of the file
format.
Importing the Data Files – Microsoft Access
5.
Select the Scan records for field length option.
6.
Do not select the Create a record number field option.
7.
In the Output file name field, enter Accounts
Receivable.
8.
Click OK.
Selecting a Control Total Field
By examining the Accounts Receivable database, you will become familiar
with the data and what is on the IDEA screen, as well as learn to specify a
Control Total field and determine the number of records in the database.
1.
The Accounts Receivable database appears in the Database window.
2.
From the Properties window, click Control Total.
3.
In the Select Control Total dialog box, click the GROSS_AMT field and
click OK.
4.
If prompted to calculate the Control Total, click Yes.
5.
The control total of 435,864.85 appears in the Properties window.
Field Statistics
Objective: To verify that the correct data has been supplied and that it has been
imported correctly before commencing testing.
1. From the Properties window, click Field Statistics.
2. If prompted, click Yes to create statistics.
3. Field Statistics are displayed for the GROSS_AMT, GST, and
PST fields.
4. Study the Field Statistics Results for the GROSS_AMT, GST,
and PST fields. Note in particular the Net Value, Average
Value, Minimum Value, and Maximum Value statistics.
Note: The values displayed in blue are drill down values. Selecting these values allows
you to see the items included in that statistics category.
Reconciling the Database
It will be necessary to exclude all paid invoices and after-date transactions to reconcile the data to the
totals provided. However, the original data file cannot be edited within IDEA, since the integrity of the
data is always assured. Therefore, the required data will be extracted into a new database using the
Direct Extraction task and entering the following equation:
• PAID_FLAG “P” .AND. DATE_DATE < “20150401” • This formula identifies those items which are unpaid and before April 1, 2015. Reconciling the Database To perform the extraction: 1. From the Analysis tab, in the Extract group, click Direct. 2. Change the default File Name provided from EXTRACTION1 to Acc Rec March 31 2015. Reconciling the Database 3. To enter the equation, click the Equation Editor button. The Equation Editor will appear and is used to enter the required equation. 4. Enter the equation, either by using the Equation Editor buttons, or by typing it in manually. PAID_FLAG “P” .AND. DATE_DATE < “20150401” Reconciling the Database 5. Once the equation has been entered, check the syntax by clicking the Validate button. 6. If a syntax error occurs in your equation, correct the expression and recheck the syntax. The equation should be as shown in the above screen. Click the Validate and Exit button. 7. Click OK to run the extraction. The resultant database Acc Rec March 31 2015 will be displayed. Reconciling the Database 7. View the Field Statistics for this database by clicking Field Statistics in the Properties window. If you get the message, “Statistics are not available for all fields. Do you wish to create statistics for all fields without statistics?” – click Yes. Notice the Net Value totals for the GST and PST fields also reconcile to the totals provided. 8. View the statistics for the DATE field and note the Earliest Date is 2014/11/04 and the Latest Date is 2015/03/31. Viewing the History Log • IDEA maintains a hierarchical History log of how each database has been created. • These logs cannot be modified and should be printed out at the end of the audit and reviewed along with all other audit documentation. Alternatively, if you use electronic working papers, the History log may be exported to a text file. Viewing the History Log To view the History log: 1. From the Properties window, click History. Note that the details of the file import, selection of the Control Total field and the extraction have been recorded. Notice that the History is displayed as a series of collapsed nodes. 2. Expand each node by clicking on its + button. Alternatively, expand all the nodes by clicking the Expand All Details button on the History toolbar. The IDEAScript code that can be used for re-running the audit at a later date is included in the History log. Random Record Sampling Objective: To choose a sample of items for confirmation and determine any other testing to prove validity. 1. Ensure Acc_Rec March 31 2015 is the active database with the Database View selected. 2. From the Analysis tab, in the Sample group, click Random. 3. Enter 20 as the Number of records to select. Random Record Sampling 4. Accept the random number seed provided by IDEA. This is used to start the algorithm for calculating the random numbers. If a sample needs to be extended, entering the same random number seed but entering a larger number of records to select will produce the same original records with the required additional records. 5. Accept the default range from which the sample will be selected. By default, the range is the first and last records (i.e., 1 - 253). 6. Leave the Allow Duplicate Records option unselected in order to prevent IDEA from selecting the same record more than once. Random Record Sampling 7. In the File name box, enter Sample of Acc_Rec Transactions. 8. Click OK to run the sample extraction. 9. View the resultant database and note the additional field, SAM_RECNO, added to the database as the rightmost column. This additional field contains the corresponding record numbers from the original database. Age Analysis Objective: To produce an age analysis of outstanding invoices at year-end in order to identify the number and value of old debts and to make the necessary provisions in the final accounts for potential write-offs. 1. Ensure Acc_Rec March 31 2015 is the active database. 2. From the Analysis tab, in the Categorize group, click Aging. 3. Using the calendar control, accessed by clicking on the Calendar button, change the date in the Aging date box (which displays the current date) to 2015/04/01. Age Analysis 4. Do not specify criteria for the test. A criterion would limit the test to only those records satisfying the specified criterion. 5. In the Aging field to use box, accept the DATE_DATE field. 6. In the Amount field to total box, accept GROSS_AMT as the amount field to total for each interval. 7. In the Aging interval in box, accept Days. 8. Change the Aging interval days to: 31, 59, 91, and 121. Only 4 intervals are required, therefore enter 0 for the 5th interval. The 6th interval will also be excluded from the analysis. Age Analysis 9. Do not select the Generate detailed aging database option. 10. Do not select the Generate Key summary database option. 11. Enter Age Analysis Report as the name for the Results output. 12. Click OK to generate the Results output named Age Analysis Report. Age Analysis The Aging Analysis Report produces the following summary information for each age interval: • # Records: number of records in a specified interval • % Records: percentage of the total number of records • Debits: debit value for the records in the specified interval • % Debits: percentage of the total debit value • Credits: credit value for the records in the specified interval • % Credits: percentage of the total credit value • Net Value: net value of the records in the specified interval • % Net Value: percentage of the total net value Additionally, it produces a summary for: • Interval Ø: Items dated on or after the aging date, in this case 2015/04/01 • Interval 121+: Items older than the final period specified • ERR: Items with invalid or missing dates • Totals: Totals for all intervals Extract High Value and Old Items Objective: To identify high value items and old items. 1. Ensure that Acc_Rec March 31 2015 database is selected as the active database and the Data property is selected in the Properties window. 2. From the Analysis tab, in the Extract group, click Direct. 3. A default File Name is provided. Change this to: High Value Amounts as shown below. Extract High Value and Old Items 4. Click the Equation Editor button. 5. Enter the expression GROSS_AMT > 10000.
6.
Once the equation has been entered,
check the syntax and close the Equation
Editor window by clicking the Validate
and Exit button.
Extract High Value and Old Items
7.
Click the second row of the Direct
Extraction dialog box and notice that a
default file name is provided.
8.
Enter the file name: Old Invoices.
9.
Click the Equation Editor button. The
Equation Editor appears and is used to
enter the required equation.
10. Enter DATE_DATE CREDIT_LIM.
6.
Validate and Exit and then click OK.
Check Debtors Against Authorized Credit Risk
• There are 16 records totaling $161,345.68.
• Fourteen are unmatched primary records where there
is no matching account number in the Customer Master
database.
• Two customers, R025 and W025, have exceeded their
credit limits.
Section 2: Accounts Receivable Audit
The content included in this presentation was taken from the IDEA Version 11 Workbook.
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Accounts Payable Audit
Provided by Audimation Services, Inc. &
the IDEA Academic Partnership Program
IDEA Version 11
New Project Folder
1.
After starting IDEA, you are able to create your project with the following procedure:
2.
On the Home tab, in the Projects group, click New.
3.
When the New Project dialog box appears, type the name Accounts Payable in the
Managed project section next to Project name and click OK.
4.
The newly created project will remain active until the Project Folder is changed.
New Project Folder
5.
From the Home tab, in the Projects group, click Properties. The Project Properties dialog box appears.
6.
Enter the following:
– Report name: Accounts Payable
– Report period: Jan 1, 2015 to Dec 31, 2015
The project properties will be stored in a file called Client.inf in the Project Folder.
Copying the Data Files
• IDEA organizes your work through Managed Projects.
• Copy the data files included in the IDEA Workbook download into the Source Files folder in the
Library for this project.
– ACCPAY2015.TXT – Accounts Payable History File
– SUPPLIER.XLS – Authorized Suppliers Excel worksheet
• Copy and paste, or drag and drop into the Source Files subfolder within the Accounts Receivable
project folder.
Copying the Data Files
•
Add the needed data files to the Source Files folder in
the Library prior to importing. To achieve this, rightclick on the Source Files and click Add File.
•
Browse to the files included with the IDEA Workbook
and add:
– ACCPAY2015.TXT – Accounts Payable History File
– SUPPLIER.XLS – Authorized Suppliers Excel worksheet
•
To import the files for testing, access the Import
Assistant by clicking Import button in the Source Data
group of the Home tab.
•
The Import Assistant guides you through the process
of importing the data.
Importing the Data Files
1. To import ACCPAY2015.TXT (an ASCII Delimited file) and
select Text.
2. Click Browse button to navigate to and select the file.
Click Open on the Select File dialog box.
3. Click Next.
4. Once the data file has been selected, the Import
Assistant will try to determine the details of the file
format.
Importing the Data Files
The Field Type will default to what the data seems
to be most like, in this case Delimited.
4.
5.
The Import Assistant will try to determine the
field separators and text encapsulators (if any)
for the file, as well as if there are any header
lines to ignore. Do not select First visible row
is field names, and click Next to proceed.
The Import Assistant – Field Details screen is
displayed. Define each field’s name and detail,
using the information shown here. Click Next.
Field Name
Type
Decimal
Date Mask
SUPPNO
C
Supplier Number
PAYEE
C
Payee
INVOICE
C
Invoice Number
INV_DATE
D
AMOUNT
N
NOT USED
C
CHECK
N
PAY_DATE
D
AUTH
C
YYYYMMDD
2
Description
Invoice Date
Amount
Not Used
0
Check Number
YYYYMMDD
Payment Date
Payment
Authorization Initials
Importing the Data Files (cont.)
6.
Click Next two more times.
7.
Before the import is finished, select the
Generate Field Statistics and name the
Database Accounts Payable.
8.
Please see the IDEA Workbook for more
details on this import.
Importing the Data Files (cont.)
Import the SUPPLIER.XLS file
1.
Select Import in the Source Data group of the
Home tab
2.
Select Microsoft Excel and click the Browse
button to navigate to and select the file.
3.
Click Open.
4.
Click Next.
Importing the Data Files
5.
The Import Assistant will display a preview
of the data and a list of any worksheets
defined within the file. Select the Address
worksheet in the Select sheets to import
box.
6.
Select the First row is field names option.
7.
In the Output file name box, delete the
default name and enter Authorized Supplier.
Field Statistics
Objective: Ensure that the data is complete and agrees
to the supplied control totals.
1.
Select the Accounts Payable database as the active
database.
2.
Click Field Statistics in the Properties window. Field
Statistics will be displayed. The following totals are
provided for reconciliation purposes.
3.
Ensure that your database totals agree.
Stratification
Objective: Gain a profile of the number and
value of payments by numeric bands to identify
any unusual trends and to determine the highvalue amount for extractions.
1.
Select the Accounts Payable database as the
active database.
2.
On the Analysis tab, in the Categorize group,
click Stratification.
3. In the Fields to stratify, select AMOUNT.
4. In the Fields to total on box, select AMOUNT.
Stratification
5.
Confirm the increment is set to $10,000 (this may
be changed when required).
6.
Click the first row of the spreadsheet area which
will fill with 0 – 10,000. Click and drag down to row
10. The bands will automatically fill with the
increment.
7.
Change the increment to $50,000 and complete the
final 2 bands (Upper Limit 200,000).
8.
Do not check the Create Database option. Create
result should be checked.
9.
Click OK.
Stratification
10. The results of the Stratification are
displayed in a new Stratification
Results output.
Inspect the Stratification Results
output for the AMOUNT field.
Stratification
12. To preview the Stratification
report, go to Print in the File
tab and select the desired
option.
Direct Extraction
Objective: To identify all high value items for testing and to identify items which do not appear
to match the profile for payments.
1. Select the Accounts Payable database as the active database with the Data property
selected in the Properties window.
2. Select Direct, in the Extract group, on the Analysis tab. The Direct Extraction dialog box
appears.
Direct Extraction
3. Enter Unusual and High Payments as the file name.
4. Click the Equation Editor button. In the Equation Editor, enter the equation:
AMOUNT >= 70000 .AND. AMOUNT < 80000 .OR. AMOUNT > 100000
5. Then select the Validate and exit button.
6. If you get a syntax error, check your
equation and make sure it was entered
properly.
7. In the Records to extract area, accept
the default selection for the All option to
extract the records from the whole
database.
Direct Extraction
8.
9.
Click OK to run the extraction.
There should be 87 records totaling $6,850,932.26
Direct Extraction
• There are a number of large value, round sum
payments for Supplier M100.
• Note the different variants of the payee name,
especially the occurrence of “Cash” within the
name.
• Many of the payments were authorized by
HMV. However, on further investigation it is
determined that HMV may only authorize
payments up to $20,000.
• Further analysis can be done to examine
anomalies. See the IDEA V11 Workbook for
additional extractions.
Benford’s Law
•
Frank Benford was a physicist at GE Research Laboratories in the 1920s. He noted that
the first parts of the log table books were more worn than the back parts. The first
pages contain logs of numbers with low first digits. The first digit is the left-most digit in
a number.
•
Benford collected data from 20 lists of numbers totaling 20,229 observations. He found
that the first digit of 1 occurred 31 percent of the time. Using integral calculus, he
calculated the expected digit frequencies that are now known as “Benford’s Law.”
•
The Benford’s task in IDEA can provide a valuable reasonableness test for large data
sets. IDEA only tests items with numbers over 10.00. Number sets with less than 4-digits
tend to have more skewed distributions and do not conform as well to Benford’s Law.
Positive and negative numbers are analyzed separately due the difference in abnormal
behavior patterns for positive numbers versus negative numbers.
Benford’s Law
Data-Based Conditions for Benford’s Law:
•
The data must describe the same phenomenon (e.g. population of cities,
height of mountains, sales figures of companies).
•
The data must not be limited by artificial minima and maxima.
•
The data must not consist of numbers following a pre-defined system, such as
account numbers, telephone numbers and social security numbers. Basically,
data complies best with Benford’s Law if it meets the rules mentioned above,
namely that the data consists of large numbers with up to 4 digits and the
analysis is based on a sufficiently large data supply. A large data supply is
necessary in order to come as close to the expected numerical frequencies
as possible.
Benford’s Law
Objective: To perform digital analysis of the AMOUNT field of Accounts Payable using the Benford’s Law task.
1.
On the Analysis tab, in the Explore group, click Benford’s
Law.
2.
In the Benford’s Law dialog box, select the Amount field as
the field to be analyzed.
3.
Accept the other default options to include values that are
positive and Show boundaries.
4.
Uncheck the option for Mean absolute deviation and
unselect the last three Analysis Types (selecting First digit,
First two digits, First three digits and Second digit).
Uncheck the Suspicious options.
Benford’s Law
5.
Click OK to perform the analyses. The Benford
First Digit results in graph form becomes active.
The other three test results can be accessed
from the taskbar.
6.
The data for the four test results can be
accessed via the File Explorer window. To view
the results in graph form again, open the
Accounts Payable database and select Benford
in the Results area of the Properties window.
7.
The graphic results for the Benford Suspicious
First Two Digits test are shown on the First Two
Digits test results graph.
Benford’s Law
Analysis:
• The First Two Digit test is performed to find anomalies in the data that are not readily apparent from
either the First Digit test or the Second Digit test when viewed on their own. A spike occurs where
the actual proportion exceeds the expected proportion as predicted by Benford’s Law. Positive
spikes (above the Benford’s curve) represent excessive duplication. One of the objectives of this test
is to look for spikes that conform to internal thresholds such as authorization limits.
• Look at the transactions that comprise the 79 two-digit combinations (indicated as highly suspicious)
by double-clicking on the graph and selecting Display Suspicious Records to drill down to the
transactions. Notice the number of transactions just under the $80,000 approval limit.
• Of the 22 transactions that make up the 79 two-digit combination, 17 are between 79,000 and
$80,000. Each of the payables clerks authorized some of the 17 transactions, but HMV was
responsible for the bulk of these transactions having authorized 9 out of 187.
Benford’s Law
• Of the 16 transactions that make up the 76 two-digit combination, 10 are between 76,000 and
77,000. Of these 10 transactions, HMV authorized 7 transactions.
• Of the 15 transactions in the 75 two-digit combination, 13 are between 75,000 and 76,000. Like
before HMV authorized 6 of the 13 transactions. In addition, there are 5 transactions for exactly
75,000. Out of these 5 transactions, 4 were payments to companies with “Cash” in the PAYEE name.
Each of these 4 transactions were paid within a few days of their invoice date, clearly a violation of
company policy.
• Because of the size of this data set (under 10,000 records), a number of transactions were identified
for further investigation using just the First Digit and First Two Digit analysis. In larger data sets, a
fine filter of transactions is necessary (i.e. the First Three Digits test).
Duplicate Key Detection
Objective: To test for duplicate payments.
1. Open the Accounts Payable database.
2. On the Analysis tab, in the Explore group, click the Duplicate Key dropdown arrow, click Detection.
3. Leave the Output Duplicate Records option selected.
4. In the File name box, enter Duplicate Payments.
5. Click Key. In the Field column, select SUPPNO – Ascending and
AMOUNT – Descending.
Duplicate Key Detection
6.
Click OK in the Define Key box to return to the Duplicate Key Detection dialog box.
7.
Click OK in the Duplicate Key Detection dialog box to run the task.
8.
View the resulting database of duplicate payments.
Duplicate Key Detection (cont.)
Results:
3 payments of 75,000 to supplier M100
2 payments of $145.50 to supplier P007
Note: Although the supplier number and
amount are the same, other information
in the record is different. These will all
require follow-up to determine whether
they are genuine duplicates.
Additional tests includes testing for duplicate supplier invoice
number (i.e. test for the same supplier number and invoice
number)
9. Close the Duplicate Payments database.
Duplicate Key Exclusion
Objective: To test for suppliers with multiple payee names
1. Open the Accounts Payable database
2. On the Analysis tab, in the Explore group,
3. click the Duplicate Key drop-down arrow, click Exclusion.
Duplicate Key Exclusion
4. In the Duplicate Key Exclusion dialog box,
5. enter the following settings:
– Fields to Match: SUPPNO
– Field that must be different: PAYEE
– File name: Suppno Multiple Payees
– Do not select Output all duplicate records.
6. Click OK to perform the test.
Duplicate Key Exclusion (cont.)
Results:
There are 120 records where the same
supplier number has different payee
names. These records total $4,524,529.75.
To see the impact of the Output all
duplicate records checkbox:
1.
On the Analysis tab, click Re-Run.
2.
Select Output all duplicate records.
3.
Change the file name to
Suppno Multiple Payees – All
Duplicate Records.
Duplicate Key Exclusion
4.
On the View tab, in the
Tabs group, click Vertical.
Note: the second database
includes all duplicate records
that meet the duplicate key
criteria, as long as some
records in the group of
duplicates have different
values for the Field that must
be different.
Gap Detection
Objective: To test for completeness by testing for missing items in a numeric
list.
1. Ensure Accounts Payable is the active database and Data is selected in
the Properties window.
2. To check the field type for the CHECK field, double-click on the database
grid to open the Field Manipulation dialog box.
3. View the format of the CHECK field and note that its type is Numeric.
Close the Field Manipulation dialog box by clicking Cancel.
Note: It is possible to test for gaps in Numeric or Date fields or in a
numeric sequence within a Character field.
4. On the Analysis tab, in the Explore group, click Gap Detection.
Gap Detection
5.
From the Field to use drop-down list, select
CHECK to test for gaps.
Note: It is possible, but do not specify a Criteria
for the test (i.e. only checks issued for a date
range).
6.
Test the whole range of check numbers by
accepting the default selection of the ALL
option. The value in the Starting and Ending
key value boxes are provided from the minimum
and maximum valued held in the Field
Statistics.
7.
Accept the Gap Increment of 1 but note that
this could be changed if required.
Gap Detection
8.
Click OK.
9.
The Gap Detection Results output of the Database
window becomes active and displays the results. To
view the missing checks, click on the + sign located on
the left side of the check sequence.
Results:
There are 2 gaps in the sequence. However there are 5
missing checks as can be seen from the inclusive ranges, i.e.,
701805, 701997, 701998, 701999, 701200.
Adding a Field
Objective: To analyze payment terms and ensure that company policy on payment is being strictly
adhered to. It is suspected that certain suppliers are rewarding staff for prompt payment of invoices.
The number of days between payment and invoice will be calculated and then analyzed.
1. Ensure Accounts Payable is the active database and Data is selected in the Properties window.
2. Double-click over the Database window to load the Field Manipulation dialog box.
3. Click the Add button to add the following Virtual Field:
– Field Name: PAY_DAYS
– Field Type: Virtual Numeric
– Field Length: Do not enter
– Decimals: 0
– Description: Number of days to pay invoice
Adding a Field
4. Click in the Parameter cell to load the Equation Editor
and enter the following equation:
@Age(PAY_DATE, INV_DATE).
Note: @Age(PAY_DATE, INV_DATE) calculates the
number of days between the specified dates (fields or
date constants). Enter the later date first to report a
positive number of days as a difference.
5. Click the Validate and Exit button, returning to the
Field Manipulation dialog box.
6. Click OK to add the Virtual field.
Adding a Field
7. View the results in the new DAYS_TO_PAY field. It will
be the right-most column in the database. Note the
color of this field indicates that the field is a calculated
field and not an original imported field.
8. Click the Field Statistics link in the Properties window to
view the statistics for DAYS_TO_PAY field. When
prompted, calculate the statistics for all fields.
Note: The company’s policy is to pay all suppliers within 2535 days of receipt of the invoice.
Joining Databases
Objective: To test the validity of payments to authorized suppliers.
Step 1: Verify a Common Key
1. Ensure Accounts Payable is the active database and Data is selected in the Properties window.
2. Double-click over the Database window to open the Field Manipulation box.
Note that the field SUPPNO is a Character field.
3. Click Cancel.
4. Click Cancel.
Joining Databases
4. Open the Authorized Supplier-Address database.
5. Double-click over the Database window to open the Field Manipulation dialog box and to
display the field layout.
Note that the field SUPPNO is a Character field.
6. Click Cancel.
Joining Databases
Step 2: Join the Databases
1. Make the Accounts Payable database the active database.
2. On the Analysis tab, in the Relate group, click Join. The
Join Databases dialog box appears with Accounts Payable
as the primary database.
3. Click Select to select the secondary database. Select the
Authorized Supplier-Address database and then click OK.
4. Change the File name in the lower section of the Join
Databases dialog box to Supplier Verification.
Joining Databases
5.
Specify the common match key by clicking on Match to display
the Match Key Fields dialog box.
6.
Click the Primary text box and select SUPPNO from the list of
fields. Note the Order text box and accept the default,
Ascending. Click the Secondary text box and select SUPPNO
from the list of fields. Click OK.
7.
There are 5 join options at the bottom of the screen.
Select the option: All records in primary file.
Note: All records in Primary file is selected:
–
There are multiple payments for each supplier.
–
The risk is that payments are to unauthorized suppliers so we are
not interested in suppliers with no payment.
Joining Databases (cont.)
8.
Click the OK button to join the selected
databases. View the resulting database.
9.
Click the History link in the Properties window,
and then locate and expand the section for Join
Databases task.
Results:
•
Note that there are 999 records in the file and
that there are 8 Unmatched Primary record –
these are payments to unauthorized suppliers.
Summarization
Objective: To analyze payments by supplier to identify
large movements.
1. Ensure the Supplier Verification database is the active
database.
2. On the Analysis tab, in the Categorize group, click
Summarization.
3. In the Summarization dialog box, select SUPPNO on
Fields to summarize.
4. Under Numeric fields to total, do not select any fields.
5. Click on Fields and select the following field:
TOT_PREV_YR. Click OK.
Summarization
6. Name the file Supplier Analysis – Control
Total.
7. The control total is 29,720,396.11. This does
not reconcile to the original control total of
30,202,660.57. The difference between the
two is 482, 264.46. Analysis is required to
determine why we have this difference.
See the IDEA 11 Workbook for further
analysis.
Summarization
8. To create a database where the total
payments have increased or decreased by
over 25% during the past year, click on the
Criteria link in the Properties Window.
9. In the Equation Editor, use the following
formula: @Abs(AMOUNT_SUM –
TOT_PREV_YR) * 100/ TOT_PREV_YR > 25)
Note: @Abs ignores the negative sign; therefore,
@Abs (expression) > 25 will identify both
increase and decrease greater than 25%.
History and Project Overview
Objective: To view the History maintained by IDEA to check what has been
done.
1. Ensure the Accounts Payable database is the active database and the Data
property is selected in the Properties window.
2. In the Properties window, click History.
3. Expand out and examine each section of the History log.
4. Can save the History log to a text file by clicking Export on the taskbar.
The History feature shows the actions taken to receive the database results.
History and Project Overview
Project Overview is a graphical overview of the actions performed
within a Project Folder, including the creation, deletion and modification
of databases.
Project Overview records all database interactions and shows the
complete history of what transpired within the Project Folder. A table
view format is also available.
To access Project Overview:
•
On the Home tab, in the Projects group, click on Project Overview.
•
Export and Print Project Overview options are available.
Section 3: Accounts Payable Audit
The content included in this presentation was taken from the IDEA Version 11 Workbook.
For more information, please contact us:
United States:
Canada:
International:
Audimation Services
CaseWare IDEA
education@audimation.com
ideatraining@caseware.com
888-641-1890
Contact your local IDEA Partner
Why should I take more classes?
• “Education is the most powerful weapon which you can use to change the world,” Nelson Mandela
• “All accredited certification looks good on your resume. It shows an employer that you have
discipline, are serious about your career and that you have some form of demonstrated technical
ability,” Joe Issid, Monster Contributing Writer and IT Professional
• “A certification holder upholds knowledge, experience, skill sets as well as the ability to shoulder
specific job responsibilities,” Shaiju Mathew, Author and LinkedIn contributor
• “In every profession, professional certification helps employee, employer, and the consumer,” Society
for Technical Communication
Get Your IDEA Certification
• Show potential employers your IDEA
knowledge.
• All industries are looking for accredited
certifications. Make your resume stand
out from the pack and get your CIDA
(Certified IDEA Data Analyst).
• Contact us for details.
Inventory Analysis
Provided by Audimation Services, Inc. &
the IDEA Academic Partnership Program
IDEA Version 11
Introduction: Inventory Analysis
• What are the risks associated with Inventory that could be addressed by computer assisted audit
procedures?
• And what tests can help address those risks?
• This section summarizes the business and audit risks that arise in the context of Inventory and the
potential tests that can be used to address those risks.
Introduction: Inventory Analysis
• The Chief Financial Officer of Bright IDEAs Inc. has called to say he has identified some problems with
the inventory system and would like you to help analyze the extent of these problems.
• Although only 36 items are identified as obsolete on the system, he thinks there are considerably
more obsolete lines that need clearing out.
• They are also suffering from frequent stock-outs and he is convinced that their margin analysis is not
accurate and that re-order levels are incorrect.
Introduction: Inventory Analysis
• He supplies you with the following information:
– There are 767 product lines in the database.
– Bright IDEAs Inc. has three depots based in Ottawa, Toronto and Quebec.
– The file is as of December 31, 2015.
• You agree on the following:
– To check the system calculation of the obsolescence provision, to prepare an analysis of inventory and usage, and to
suggest an appropriate provision.
– To identify items with apparent incorrect re-order levels.
– To perform an analysis of profit margins on different lines.
New Project Folder
1.
After starting IDEA, you can create your new project with the following procedure:
2.
On the Home tab, in the Projects group, click New.
3.
When the New Project dialog box appears, type the name Inventory Audit in the
Managed project section next to Project name and click OK.
4.
The newly created project will remain active until the Project Folder is changed.
New Project Folder
5.
From the Home tab, in the Projects group, click Properties. The Project Properties dialog box appears.
6.
Enter the following:
– Report name: Inventory Audit
– Report period: Jan 1, 2015 to Dec 31, 2015
The project properties will be stored in a file called Client.inf in the Project Folder.
Copying the Data Files
• IDEA organizes your work through Managed Projects.
• Copy the data files included in the IDEA Workbook download into the Source Files folder in the
Library for this project.
– Inventory 2015.ASC – Inventory on hand at December 31, 2015
• Copy and paste, or drag and drop into the Source Files subfolder within the Accounts Receivable
project folder.
Importing the Data Files
•
Add the needed data files to the Source Files folder in
the Library prior to importing. To achieve this, rightclick on the Source Files and click Add File.
•
Browse to the files included with the IDEA Workbook
and add:
– Inventory 2015.ASC – Inventory on hand at December 31, 2015
•
To import the files for testing, access the Import
Assistant by clicking Import button in the Source Data
group of the Home tab.
•
The Import Assistant guides you through the process
of importing the data.
Importing the Data Files
1.
From the Home tab, in the Import group, click Desktop.
2.
Select Text from the list. Click the Browse button and the
Select File dialog box will be displayed. Select the Inventory
2015.asc file and click Open. Then click Next.
3.
The Import Assistant – File Type screen will be displayed.
4.
Ensure Delimited is selected as the correct file type.
5.
View the data and determine the field separator and the
record delimiter.
6.
Click Next.
Importing the Data Files
7.
The Import Assistant will try to determine the
Field Separators and Text Encapsulators (if any)
for the file.
8.
Do not select First visible row is field names
and accept the rest of the default settings.
Click Next to proceed.
Importing the Data Files
9.
Click on each field heading in turn and using
the record definition, define the field details.
10. Enter the correct field name in the Field name
box. The Import Assistant suggests the file type
for that field in the Type box. If this is incorrect,
change it to the file type shown in the table.
11. Enter the description in the Description box.
Importing the Data Files
12. Specify the number of decimals in the Number
of decimals box.
Do not select implied decimals. The implied
decimals setting is for some legacy data sources
that omit the decimal point in order to save
space, and specify the number of decimal places
elsewhere.
13. Define the Date fields as type Date, i.e. change
the Character to Date in the Type box. A mask
must be defined for the Date fields. Click the
Date Mask box and enter the appropriate date
format YYYYMMDD.
Importing the Data Files
14. Click Next to proceed. The Import Assistant – Create Fields
dialog box appears. Create Fields allows you to add fields in
the imported file, but is not necessary in this exercise. Click
Next.
15. Click Next. The Import Assistant – Import Criteria screen
appears. We will not be entering criteria for this example.
16. Click Next. The definition will automatically be saved in the
Project Import Definitions.ILB. IDEA will give the definition
the same name as the source file. Click the Browse button
adjacent to the Save record definition as box if you want to
change the name to something other than Inventory2015.rdf.
17. Select the Generate field statistics option and enter Inventory
at Dec 31 2015 in the Database name box.
Importing the Data Files
18. Click Finish to import the file into IDEA.
19. Click the Control Total link in the Properties window and select the TOTALCOST field and then click OK.
20. The control total of 626,963.915 will appear beside the Control Total link in the Properties window.
There are 767 records as can be seen on the status bar at the bottom of the screen. You are now ready to
verify that the data has been imported correctly and commence testing.
Verifying the Data
Objective: To verify the data has been imported correctly
and the totals of the inventory report are accurate.
1.
Click the Field Statistics link in the Properties window.
Field Statistics are displayed for the Numeric fields in
the database.
2.
Study the Field Statistics for all Numeric fields, but
especially, the QTY and TOTALCOST fields. Notice in
particular the Net Value, Minimum Value, Maximum
Value, # of Zero Items and # of Negative Records field
statistics. Check your results against the figures in the
table for QTY.
Verifying the Data
3.
If your computer is attached to a printer, print the Field
Statistics for the QTY and TOTALCOST fields by clicking the
Print button on the Field Statistics toolbar and selecting
each field.
4.
The Field Statistics reports should be filed with the audit
documentation as proof of reconciliation.
5.
Return to viewing the database by clicking the Data link in
the Properties window.
Conclusion
The file has been imported correctly and the client’s reports
reconcile correctly. However there are some negative items and
we should identify these and report them to the client.
Identify Obsolete Items
Objective:
• To check the client’s calculation of the obsolescence report.
• To identify obsolete inventory and calculate potential provisions.
• To identify any items with negative quantities or costs.
1.
Click Field Statistics in the Properties window.
2.
In the Field Type box, select Date.
3.
Notice the Earliest Date, Latest Date, and # of Zero Items (i.e., missing dates) statistics for DELDATED.
Check your results against the figures in the table.
Identify Obsolete Items
The next test to carry out is to prove the client’s obsolescence provision report.
4.
Return to viewing the database by clicking on the Data link in the Properties window.
5.
From the Analysis tab, in the Extract group, click Direct.
6.
Change the file name to Obsolete Inventory Items.
7.
To enter the equation, click the Equation Editor button. The Equation Editor appears and is used to
enter the required equation to identify items flagged as obsolete.
8.
Enter the expression: OBSOLETE = “Y”
Once the equation has been entered, check the syntax by clicking the Validate button. If a syntax
error occurs in your equation, correct the expression and recheck the syntax. The equation should
be as in the above screen. Click the Validate and Exit button but do not run the extraction yet.
Identify Obsolete Items
9.
Multiple extractions (up to 50) can be carried
out with a single pass through the database.
We will use this feature to report the negative
items. Click on the next row in the spreadsheet
area of the Direct Extraction dialog box. Enter
the file name: Negative Quantities.
10. Click the Equation Editor button and enter the
following equation: QTY < 0. Click the Validate and Exit button but do not run the extractions yet. Identify Obsolete Items 11. Click the next row of the Direct Extraction dialog box. Enter the file name: Negative Cost Items with the equation TOTALCOST < 0. 12. Click OK to run all 3 extractions with a single pass through the database. The resulting databases will be created and the Obsolete Inventory Items database will be displayed. Identify Obsolete Items • There should be 34 items totaling $7,644.270 which agrees with the client’s report. • Open the Negative Cost Items database. It contains 3 items totaling $-97.850. • Open the Negative Quantities database. It contains 3 items totaling $-30.850. Conclusion: The client’s reported totals for items flagged as obsolete are accurate. Whether other items should be flagged as obsolete will be tested next. The negative items have now been identified and can be given to the client for correction. Calculate Inventory Usage and Provision Objective: To analyze inventory usage and calculate provision. 1. Open Inventory at Dec 31 2015 as the active database. 2. Double-click over the Database window to open the Field Manipulation dialog. 3. On the Field Manipulation dialog box, click Add and enter the following details: – Field Name: MONTHS – Field Type: Virtual numeric – Field Length: Do not enter – Decimals: 2 – Description: Months of inventory on hand Calculate Inventory Usage 4. Click in the Parameter cell to load the Equation Editor and enter the following equation: @If(USAGE = 0, @Age(“20151231”,DELDATED)/30 , QTY/(USAGE/12)) – In the @Functions area, expand the Conditional category. This displays the two conditional @Functions, @Compif and @If. Click @If and read the help and example in the information area. – Double-click to select @If, inserting it into the Equation area, or click Insert Function. – Continue selecting and typing the relevant items to build the equation. Ensure parentheses are in the correct position. Calculate Inventory Usage 5. Click the Save Equation button on the Equation Editor toolbar. When the Save As dialog box appears, enter the file name: Months of Inventory on Hand. 6. Click Save. Equations are save with an .eqx file extension. 7. Click the Validate and Exit button, returning to the Field Manipulation dialog box. 8. Click OK and then Yes to add the field to the database. 9. View the resulting field by scrolling to the right of the display. Note the teal color of this field indicating that it is a calculated field and not an original imported field. Calculate Inventory Usage In discussion with the client, it becomes apparent that the shelf life of most Bright IDEA’s products is only a few months and anything in excess of six months’ use is likely to be obsolete. 10. To view saved equations, look at the Library tab at the bottom of File Explorer. 11. The Library tab contains a list of all the directories in which IDEA stores different type of information, such as equations, macros, exported documents, record definitions, custom functions, import definitions and source files. The equation was saved automatically to the Equations folder in the Current Project Library. 12. If you wish to have any item in the Current Project Library available to all projects, you can right click on the item and select Copy to the Local Library. You can also copy the item to another project in the same manner by copying to Another Project. Calculate Inventory Usage To generate the Field Statistics for the MONTHS field: 1. Click on the Field Statistics link in the Properties window. A message dialog box appears that asks whether you want to create statistics for all fields without statistics. 2. Click Yes. Field Statistics will be recalculated for all invalid or new fields. View the statistics for the MONTHS field. 3. Notice the Average Value, Minimum Value, and Maximum Value. Calculate Inventory Usage Stratify the Inventory into Bands 1. Ensure Inventory at Dec 31 2015 is the active database and Data is selected in the Properties window. 2. From the Analysis tab, in the Categorize group, click Stratification. 3. Select MONTHS in both the Field to stratify and Fields to total on list boxes. – Click on the Increment text box and enter 6 (6.00 will be displayed). – Click on the first row of the spreadsheet area – the Lower Limit box will automatically fill with the lowest value in the field to be stratified. – Double-click on the Lower Limit box in the first row; the value will be highlighted so you can type over it to change it. Change the value to 0 (0.00 will be displayed). – Click in the Upper Limit box on the first row of the spreadsheet area which will fill in your first increment. – Highlight the next 5 rows of the spreadsheet area and note how they fill with the increment, this should take the range up to 36. Calculate Inventory Usage 4. Select both the Create database and Create result options. 5. Select the Include stratum intervals option. 6. Change the file names for both the database and result to Inventory Usage Aging. 7. Click Fields and select only PRODCODE, DEPOT, TOTALCOST, and MONTHS. To select or deselect a field, click the field name. 8. Click OK in the Fields dialog box. 9. Click OK in the Stratification dialog box. Calculate Inventory Usage 10. Note the number of records in each stratum and that there are Upper limit exceptions, i.e. items with greater than or equal to 36 months inventory in hand. 11. View the items with greater than or equal to 36 months inventory in hand by clicking over the Upper limit exceptions results and selecting Display Records. Note that these items may be viewed, saved to a database, or printed. Once you have inspected the records, click Done to return to the Results output. 12. Create and print a report of the Stratification Results, including a graph. Calculate Inventory Usage 13. On the Stratification Results output toolbar, click the Chart Data icon on the Results toolbar. Select the 3D option on the toolbar. 14. If your computer is attached to a printer, click Print on the Results toolbar. 15. Return to viewing the Stratification analysis by clicking the Chart Data icon on the Results toolbar. 16. Return to viewing the database by clicking on Data in the Properties window. Calculate Inventory Usage 17. Open the Inventory Usage Aging database created as part of this exercise. View this database and note the three additional fields added to the database (i.e., STRATUM, STRAT_LOW, STRAT_HIGH). The last two fields were added as a result of checking Include stratum intervals on the Stratification dialog box. 18. Close all databases by clicking the File tab and then Close All Databases. Conclusion: There are 611 (or 79.66%) of the product lines that have less than 6 months usage. However, 4.43% (34 lines) have more than 3 years usage and these are a cause for concern. There are also 3 items with negative usage, these should be identified and investigated. Calculate Inventory Provision Objective: • To provide an analysis of the total cost of the obsolete inventory. • To identify old items for checking. • To analyze the data by depot. Include Provision in Database 1. Open and ensure that Inventory Usage Aging is selected as the active database. 2. Double-click over the Database window to load the Field Manipulation dialog box. Calculate Inventory Provision 3. Click Add to add a field: – Field Name: PROV_RATE – Field Type: Virtual numeric – Field Length: Do not enter – Decimals: 2 – Description: Rate at which provision is to be calculated 4. Click in the Parameter box to load the Equation Editor and enter the following equation: @If(STRATUM 50 .AND. PREVSELLPRI 0 – @Abs(PRICE_MOV) > 50 identifies increases and decreases > 50%. PREVSELLPRI 0 excludes new items.
There should be 15 items, of which 7 have usage.
21. Run the extraction.
22. Close the Major Price Movements database.
Conclusion
Most items have had modest price increases. Items should be referred to the client to ensure the prices are correct.
Analyze Selling Prices/Margins
Analyze Profit Margins
1.
Ensure Inventory at Dec 31 2015 is selected as the active
database and Data is selected in the Properties window.
2.
Double-click on the database window to load the Field
Manipulation dialog box.
3.
Click Add to add the following field:
–
Field Name: PROFIT
–
Field Type: Virtual numeric
–
Field Length: Do not enter
–
Decimals: 2
–
Description: % Profit
Analyze Selling Prices/Margins
4.
Click in the Parameter cell to load the Equation Editor and enter the following equation:
@If (CURSELLPRI = 0, 0, (CURSELLPRI – AV_COST)*100 / CURSELLPRI) to calculate profit
as a percentage of price.
5.
Click the Validate and Exit button, returning to the Field Manipulation dialog box.
6.
Click OK on the Field Manipulation dialog to add the PROFIT field to the database.
7.
Click Field Statistics in the Properties window.
8.
When prompted, click Yes to create statistics.
Analyze Selling Prices/Margins
The average is meaningful here. However items with negative
margins should be extracted. It is often expected that low volume
items should have a high margin and high volume items should
have a lower margin.
9.
Click on Data in the Properties window of the Inventory at
Dec 31 2015 database.
10. From the Analysis tab, in the Extract group, click Direct.
11. Enter file name: Negative Profit Items.
Analyze Selling Prices/Margins
12. Click the Equation Editor button and enter the equation: PROFIT < 0. 13. Click the Validate and Exit button on the Equation Editor. 14. Click OK to extract the items satisfying the equation. The three items identified have no quantity or usage so they have not caused the client any problems, but the client should still be informed. 15. Close the Negative Profit Items database. Analyze Selling Prices/Margins In order to analyze profit margins by the volume of sales we need the sales information. This is not available on the file but taking the annual usage figure and multiplying by the current selling price can give an approximation. 1. Ensure Inventory at Dec 31 2015 is the active database and Data is selected in the Properties window. 2. Double-click on the database to open the Field Manipulation dialog and click Add to add the following field: – Field Name: SALES – Field Type: Virtual numeric – Field Length: Do not enter – Decimals: 0 – Description: Estimate of Sales 3. Click in the Parameter cell to open the Equation Editor and enter the formula: USAGE * CURSELLPRI 4. Click the Validate and Exit button to accept the equation. 5. Click OK and then Yes to add the Virtual field. Analyze Selling Prices/Margins 5. Analyze the items in turnover bands by clicking Stratification from the Categorize group on the Analysis tab. 6. In Field to stratify list box, select SALES. 7. In the Fields to total on list box, select SALES. 8. Enter the following stratification bands as shown. 9. Select the Create Database option and enter the file name: Inventory with Turnover Band. 10. Click OK to perform the Stratification. Analyze Selling Prices/Margins 11. Further analyze the items in turnover bands by clicking Stratification from the Categorize group on the Analysis tab. 12. In the Group by drop-down list, select STRATUM. 13. In the Field to stratify list box, select PROFIT. 14. In the Fields to total on list box, select PROFIT. 16. Enter the stratification bands as shown. 17. In the Result name box, enter Profit Stratification. 18. Click the OK button to perform the Stratification. Analyze Selling Prices/Margins 19. View the stratification report for the first key (i.e., Stratum 1) in the Profit Stratification output of the Database window. 20. In the STRATUM= list box, select each stratum in turn and view the Stratification Reports to view a separate stratification of profitability for each strata of turnover. 21. Close all databases by clicking the File tab and then Close All Databases. Audit Findings The following findings should be reported to the client: • About 13% of the product lines have excessive quantities on stock and a provision of about $150,000 is suggested. • The re-ordering system is not working correctly, and items have been identified for investigation. • Price increases and profit margins are mostly reasonable, but exceptional items have been identified for follow-up. Section 4: Inventory Analysis The content included in this presentation was taken from the IDEA Version 11 Workbook. For more information, please contact us: United States: Canada: International: Audimation Services CaseWare IDEA education@audimation.com ideatraining@caseware.com 888-641-1890 Contact your local IDEA Partner Why should I take more classes? • “Education is the most powerful weapon which you can use to change the world,” Nelson Mandela • “All accredited certification looks good on your resume. It shows an employer that you have discipline, are serious about your career and that you have some form of demonstrated technical ability,” Joe Issid, Monster Contributing Writer and IT Professional • “A certification holder upholds knowledge, experience, skill sets as well as the ability to shoulder specific job responsibilities,” Shaiju Mathew, Author and LinkedIn contributor • “In every profession, professional certification helps employee, employer, and the consumer,” Society for Technical Communication Get Your IDEA Certification • Show potential employers your IDEA knowledge. • All industries are looking for accredited certifications. Make your resume stand out from the pack and get your CIDA (Certified IDEA Data Analyst). • Contact us for details. FRAUD EXAMINATION ON Bright IDEAS, Inc. Corporate Security Table of Contents I. Background 2 II. Curriculum Vitae 3-5 III. Executive Summary 6- IV. Scope and Methodology 8- V. Detailed Findings A. Accounts Receivable Review B. Accounts Payable Review and Fraud Investigation C. Inventory Analysis VI. Conclusions and Recommendations VII. Appendix I. Background A team was hired by Bright IDEAS, Inc. CFO, Mr. Curt Cuthbert, to perform an accounting review and fraud examination for the purposes of: 1. Identifying and making recommendations on the internal controls, with closer attention to Accounts Receivable, 2. Investigating potential fraud and, 3. Identifying obsolete stock and making recommendations on calculating inventory provisions. Using IDEA software, the team conducted the appropriate examinations, including an audit of the Accounts Receivable, investigation and audit of the Accounts Payable, and an analysis on Inventory. II. Curriculum Vitae Forensic Accountant Group Objective: To produce accurate and comprehensive forensic accounting reports and review for Bright IDEAS, Inc to identify and make recommendations on improving internal controls, investigate potential fraud and, identify obsolete stock and make recommendations on the calculation of inventory provisions. Members: Adriene Gardner, CPA, CFE Over 15 years of experience in forensic accounting and auditing Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE) Expertise in fraud investigations, financial statement analysis, and litigation support Strong analytical and problem-solving skills Excellent communication and interpersonal skills Alexis Guerth, CPA, CFE More than 10 years of experience in forensic accounting and auditing Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE) Specializes in fraud investigations and financial statement analysis Proficient in using various accounting software and data analysis tools Strong attention to detail and ability to work under pressure Ariel Shieh, CPA, CFE Over 12 years of experience in forensic accounting and auditing Certified Public Accountant (CPA) and Certified Fraud Examiner (CFE) Expertise in fraud investigations, embezzlement, and financial statement analysis Proficient in using various data analysis tools and computer-assisted audit techniques (CAATs) Strong project management skills and ability to work in a team environment Brady Burcin, CPA, CFE, CFF More than 20 years of experience in forensic accounting and auditing Certified Public Accountant (CPA), Certified Fraud Examiner (CFE), and Certified in Financial Forensics (CFF) Specializes in fraud investigations, financial statement analysis, and inventory analysis Proficient in using various accounting software and data analysis tools Strong attention to detail and ability to work under pressure Sandra Matti, CPA, CFE, CFF Over 15 years of experience in forensic accounting and auditing Certified Public Accountant (CPA), Certified Fraud Examiner (CFE), and Certified in Financial Forensics (CFF) Expertise in fraud investigations, financial statement analysis, and litigation support Strong analytical and problem-solving skills Excellent communication and interpersonal skills Experience: ● Conducted numerous fraud investigations and provided litigation support for various clients, including Fortune 500 companies and government agencies ● Prepared comprehensive forensic accounting reports and testified as an expert witness in court ● Worked closely with law enforcement agencies and regulatory authorities to uncover financial fraud and misconduct ● Provided fraud prevention and detection training to company executives and employees Education: All members have a Bachelor's degree in Accounting or Finance, and some have additional certifications such as CFE, CFF, or CPA. Skills: Fraud investigations Financial statement analysis Litigation support Data analysis Computer-assisted audit techniques (CAATs) Fraud prevention and detection training Communication and interpersonal skills Project management Overall, the Forensic Accountant Group has a wealth of experience in forensic accounting, fraud investigations, and litigation support. They are dedicated to producing accurate and comprehensive reports for their clients and have a proven track record of success in uncovering financial fraud and misconduct. III. Executive Summary IV. Scope and Methodology The team’s objective includes performing an accounting review along with fraud investigation should something warrant said investigation for Bright IDEAS, Inc. The accounting review focuses on Accounts Receivable, Accounts Payable, and an Inventory Analysis. Analyses were conducted via the IDEA software with methods described below. V. Detailed Findings A. Accounts Receivable Review B. Accounts Payable Review and Fraud Investigation C. Inventory Analysis VI. Conclusions and Recommendations VII. Appendix

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