You are hired as a consultant to Wheely Inc., a large chain of retail bookstores. Barbara Brown, Wheely’s financial controller, is concerned about the heavy losses of inventory in Melbourne store. The store has both receiving and customer-sales areas. Incoming shipments of books are received in the secure receiving area, and after checking them against order lists, books are carted into the customer sales area. The customer sales area has a single entrance with four cash registers a few metres away.
Wheely uses an antiquated accounting system, so a lot of the paperwork and recordkeeping is done manually. The accountants are unable to say how many books may have been stolen or lost. They only do a complete inventory once a year, and even then they are unable to accurately estimate shortages.
Barbara Brown has a gut feeling about the losses. She has a rough feeling for sales and some of the best-selling hardbacks, and just a quick visual inspection of the shelves tells her that she should be seeing a lot more books than are actually there.
Ms Brown would like to know whether you can help and how.
the question is:
1. Explain the significance of forensic accounting specific to this case and how a forensic accountant can contribute to the effective investigation of the case.
2. Your understanding of the case, including potential hypotheses.
Additionally, requires a lot of analysis, for example in question 2: your understanding about the case must link to hypothesis, and you should analyse the reason you choose those hypothesis, link them to what we study in class, and mention the solution and its reasons to deal with each hypothesis