Outline of the case
We had a case in which there was a discrepancy between the amount of money collected and the amount of money kept in a safe at a client company of our firm. Although the amount of money itself was not large, we were asked by the company representative to investigate whether or not there was any embezzlement.
Investigation by the Company
If an employee of a company commits embezzlement or breach of trust, he or she will be subject to disciplinary action if the fact is discovered, and will often be forced to resign, in effect. Therefore, the employee may often deny the fact until confronted with clear and convincing evidence. The company had also conducted an investigation of accounting-related documents, but the documents had not been collected and organized properly.
Preparation for Hearing
When our firm and others decided to conduct an investigation, we asked the company’s personnel to submit all relevant documents, but they were not well organized and lacked much of the evidence necessary for determining the facts of the crime. We asked the company to further investigate the relevant facts, and it became clear that it would be difficult for other employees to gain access to the safe during that period without the knowledge of their supervisors by conducting hearings with other accounting personnel. In preparation for the hearing, our firm and others considered which parts of the individual’s explanation were inconsistent or unreasonable, referring also to the newly revealed evidence.
Conducting the Hearing
At the hearing, we decided to ask the person himself about inconsistencies in his explanations and discrepancies with the evidence. As a result, he tried very hard to come up with an explanation that was quite unreasonable, and his explanation became obviously strange. As we listened to his explanation, we became convinced that he was lying. We then confirmed that if he admitted the facts, we would ask him to repay the damages in installments and not make the problem any bigger, but if he did not admit the facts, we would file a complaint with the police and enlist the police to conduct an investigation. As a result, we were able to obtain a statement from the individual admitting the fact of embezzlement.