- May 28, 2020
- Posted by: IBA LLP
- Category: Risk Advisory
Client Industry: Pharmaceutical Industry
The group was engaged in the manufacturing of Pharmaceutical Equipments. The Head of Finance Department, Procurement Department and Administration Department were being informed through whistle blower mechanism that Senior Manager – Administration Department (“the Suspect”) is taking vendor kick-backs while booking Domestic and International air tickets for the employees of the Company. After doing in house research by the management, the Company engaged us to unearth the fraud, identify the possible quantum of losses incurred and identify the modus operandi behind this fraud.
Our Approach & Methodology :
- Our audit team worked jointly with the management of the Company and its IT team to understand the whole process of vendor selection and onboarding including ticket booking and payment for the same to the travel agent/vendor
- We performed mirror imaging of the Suspect’s computer, and performed computer forensic activities including keyword searches and dedupe check
- With the help of computer forensics, we found edited ticket quotations along with originals which were being edited in word as well as in pdf format
- As a next step, we performed market level searches which included social media searches, site visits on vendor locations, Suspect’s past history along with checking the organisations in which he has worked before to establish nexus between him and the travel agency
- On reviewing conversation made through Suspect’s personal e-mail id, we found that he was sharing these edited ticket quotations with travel agent based on which travel agent was raising the fare charges invoices to Company
- We then coordinated with the airline department, performed desktop searches and extracted usual travel fare between the locations which were mentioned on the ticket quotations. We then compared this travel fare with that of travel agent invoices to identify the quantum of fraud
- With the help of our audit, market researches and ground field work, we were able to collate certain concrete evidences based on which our team along with management interviewed the suspected person and travel agent
Outcome of the Review :
With our expertise in the field of Forensic Audits, we were able to successfully conduct the review and established that the Senior Manager – Administration Department was involved in this fraudulent activity. We submitted our report to the management along with all the evidences based on which management terminated the Suspect from the services and initiated filing complaint with the local authorities.