Wolf & Company was contacted by a large publicly-traded holding company that consisted of multiple subsidiaries, and further acquisition planned by its Board. As the CFO was reviewing the books, they noted some accounting discrepancies. Due to Wolf’s reputation in the industry, the CFO contacted us upon suggestion from another of the company’s professional advisors.
After the discrepancies were noted, the company used a consultant to uncover a problem. Wolf was tasked with determining how big the problem was and how far it went. Wolf utilized data mining and deep knowledge of industry accounting practices to follow the transactions through the system and identify what was going on. Wolf focused on the areas of highest risk, and adjusted the plan so that resources were being used in the areas with the highest likelihood of fraud. The Wolf team verified that account balances were properly supported and confirmed that no illegal activity took place.
As a result of this work, Wolf was able to assure the management group that no fraud had been committed. Instead, it was determined that human error based on time constraints and resources was the cause of the accounting discrepancies. Wolf assisted the company with adjusting its procedures to provide greater confidence to the Board of Directors and external auditors.