Assess whether a referral to counsel is warranted (013c4c)

Situation

Occupational Fraud work in a construction contractor on percentage-of-completion now turns on a referral to counsel is warranted because a Big 4 inquiry on cutoff testing put management-bonus accrual workbook in play. External counsel's accounting expert should say what management-bonus accrual workbook proves.

Decision

External counsel's accounting expert in a construction contractor on percentage-of-completion must choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold using management-bonus accrual workbook after a Big 4 inquiry on cutoff testing.

Hypotheses to test

• External counsel's accounting expert can defend Remove access or reverse the item from management-bonus accrual workbook after a Big 4 inquiry on cutoff testing in a Forensic Accounting challenge.
• External counsel's accounting expert cannot defend Remove access or reverse the item from management-bonus accrual workbook; Temporary compensating control is what the extract actually supports after a Big 4 inquiry on cutoff testing.
• A Big 4 inquiry on cutoff testing never reached the population in management-bonus accrual workbook — reopen intake, do not close a referral to counsel is warranted.
• Two facts in management-bonus accrual workbook after a Big 4 inquiry on cutoff testing conflict for external counsel's accounting expert; hold this Occupational Fraud file.

Analysis required

• Reconstruct vendor, journal, or inventory lines in management-bonus accrual workbook through the window opened by a Big 4 inquiry on cutoff testing.
• Trace approval, SoD, and related-party links that management-bonus accrual workbook actually shows.
• Test cutoff, reversals, and system-of-record ties for materiality on a referral to counsel is warranted.
• For this Forensic Accounting Occupational Fraud file, read management-bonus accrual workbook against a Big 4 inquiry on cutoff testing and write the one fact that would move a referral to counsel is warranted for external counsel's accounting expert.

Recommendation

Choose Remove access or reverse the item / Temporary compensating control / Approve a documented exception / Hold on this Forensic Accounting / Occupational Fraud packet (management-bonus accrual workbook after a Big 4 inquiry on cutoff testing). If management-bonus accrual workbook cannot force a Forensic Accounting label under Occupational Fraud, stop. Do not invent pages a construction contractor on percentage-of-completion does not have.