Problems in the procurement department of Bucket Corp.

1. What could the CFO do to investigate the potential problems in the procurement department of Bucket Corp.?

The CFO could do the following to investigate the potential problems in the procurement department of Bucket Corp.:

• Review the sample invoices provided. The CFO should look for any unusual or suspicious patterns in the invoices, such as unusually high prices, invoices from vendors that Bucket Corp. has never done business with before, or invoices that do not seem to correspond to any legitimate business expenses.
• Interview procurement department employees. The CFO should interview the employees in the procurement department to get their insights into the problems that may be occurring. The CFO should ask questions about the procurement process, the vendors that Bucket Corp. does business with, and the criteria that are used to select vendors.
• Review the procurement department’s policies and procedures. The CFO should review the procurement department’s policies and procedures to make sure that they are adequate to prevent fraud and abuse. The CFO should also look for any gaps or loopholes in the policies and procedures that could be exploited by fraudsters.
• Conduct a forensic audit. If the CFO suspects that fraud may be involved, they may need to conduct a forensic audit. A forensic audit is a detailed investigation that is designed to uncover evidence of fraud.

2. Do you think it is possible there is fraud involved? Why?

It is certainly possible that there is fraud involved in the procurement department of Bucket Corp. The sample invoices provided show some unusual patterns, such as unusually high prices and invoices from vendors that Bucket Corp. has never done business with before. These patterns could be signs of fraud.

In addition, the CFO’s investigation may uncover other evidence of fraud, such as employees who have close personal relationships with vendors, or employees who have been receiving kickbacks from vendors. If the CFO finds evidence of fraud, they should take appropriate action to investigate and prosecute the perpetrators.

Here are some of the red flags that may indicate fraud in the procurement department:

• Unusually high prices: Invoices that are significantly higher than the market price for the goods or services being purchased may be a sign of fraud.
• Invoices from new or unfamiliar vendors: Invoices from vendors that Bucket Corp. has never done business with before may be a sign of fraud.
• Invoices that do not correspond to any legitimate business expenses: Invoices that do not appear to be for goods or services that Bucket Corp. actually needs may be a sign of fraud.
• Employees who have close personal relationships with vendors: Employees who have close personal relationships with vendors may be more likely to engage in fraudulent activities.
• Employees who have been receiving kickbacks from vendors: Employees who have been receiving kickbacks from vendors may be more likely to engage in fraudulent activities.

If the CFO finds any of these red flags, they should investigate further to determine if fraud is actually taking place.