Robert Ford, Director of Internal Auditing, received an anonymous tip from an employee in one of the high-tech manufacturing plants. The employee noted that there was a main embezzlement occurring in one of the divisions. Internal audit had completed a routine review of internal control of that division the prior year and found that the control system was properly designed and operating efficiently. Only minor recommendations were made, and the next review would be scheduled for 3-years.
The employee noted that the erratic behavior and lavish lifestyle of plant controller and that the controller has been overriding existing controls in such a way that any audit would not be capable to detect the embezzlement. The plant controller is well respected and highly trusted by the CEO and CFO and their families are included in the same civic and religious organizations. Investigating the plant controller could cause considerable disruption in the company and in the personal lives of the employees.
1) Given the condition, describe some of the options the company has for handling this condition.
2) Supposing that you decide to investigate these allegations, describe the investigation steps.