Question

Running international sales and service operations is a very challenging job. Consider the following scenario:

Sales personnel working for overseas sales and service subsidiaries are paid a salary plus commission. The commission is paid after the customer signs the sales agreement and it has been processed through the sales and accounting departments. Sales people must meet quarterly sales quotas to earn bonuses. The bonus amounts are based on the value of the sales agreements. The sales department reviews the sales agreements to make sure the pricing and all the information is accurate and complete. The accounting department performs a final check on the sales agreements, initials their review, and returns them to the sales department for processing into the Order Processing Information System. The processing of every sales agreement is performed by the Contract Administration Supervisor.

You are the Vice President of these overseas sales and service subsidiaries. While visiting one of the overseas subsidiaries, the accounting manager asks to speak with you privately in the conference room. He informs you that he recently found some sales agreements had been entered into the Order Processing Information System that never came through the accounting department for a final review. He also informed you that someone apparently forged his initials on some of the sales agreements. To verify his statement, the accounting manager showed you a few contracts he had initialed and other sales agreements with his initials, but in someone else’s handwriting.   All of the sales agreements in question were customers assigned to the sales manager.

Please provide an initial response to each question below; then, read your classmates’ responses and respond substantively to at least two of your classmates’ initial responses to each question. To make sure you cover the Requirements of this Discussion, I suggest you copy and paste each question below into your initial response:

What step(s) should be taken immediately and before interviewing the personnel that may be involved in committing this fraud? Be specific.

After speaking with the accounting manager and gathering the information that you require, who would you speak with first,? Why would you speak with that person, first?

What other types of informal inquiries might you make, very carefully and tactfully, before interviewing the Contract Administration Supervisor?

What other types of informal inquiries might you make, very carefully and tactfully, before interviewing the Sales Manager?

Answer 1

What step(s) should be taken immediately and before interviewing the personnel that may be involved in committing this fraud? Be specific.

Check whether the initials are truly forged.

Ask the account manager, how did he come to know about this.

See the records if this thing has been done in the past, if yes check the history.

Calculate the amount involved in the fraud, and who would benefit from it.

After speaking with the accounting manager and gathering the information that you require, who would you speak with first,? Why would you speak with that person, first?

I would speak to the sales manager first, who might have got benefitted from it. I would ask him whether he has made any such deal.

What other types of informal inquiries might you make, very carefully and tactfully, before interviewing the Contract Administration Supervisor?

I will speak to the sales department to see from where they got the documents in the first place only.

If it was not passed through them, then finally how the document reached to Contract Administration Supervisor.

What other types of informal inquiries might you make, very carefully and tactfully, before interviewing the Sales Manager?

See whether there are any other such documents.

Make an internal investigation team to work on the same.

Ask everyone who know about the fraud to cooperate.