Question

Bob Taylor, CFE, is writing a report on his findings from an investigation into an alleged inventory larceny scheme. During his investigation, he was unable to accurately quantify the amount of the loss to the victim company, but he assumes that the loss falls between $100,000 and $200,000. In the report, Bob should report the amount of the loss as $200,000 so that the company can recoup as much money as possible from the perpetrator.

a. True
b. False

Answer 1

Bob Taylor, CFE, should report the loss as a range between $100,000 and $200,000, not as the highest possible amount.

Overstating the loss is unethical and could have serious consequences.

Step-by-step explanation:

The assertion that Bob Taylor, CFE, should report the amount of the loss as $200,000 in his report on inventory larceny is false. When conducting an investigation and reporting on findings, it is crucial to maintain accuracy and integrity.

If the loss cannot be precisely quantified and is estimated to be between $100,000 and $200,000, it should be reported as a range and not as the highest possible amount. Overstating the loss could be considered unethical and could lead to legal or professional consequences.

As a Certified Fraud Examiner (CFE), Bob is expected to adhere to professional standards that require accurate and honest reporting.

False. Bob should report the amount of the loss as $100,000 - $200,000 because that is the range within which he assumes the loss falls.

Reporting the loss as $200,000 without accurate evidence would be misleading and could have legal implications. It is important for Bob to provide an honest and accurate report based on the evidence he has gathered during the investigation.