Fraud Examination Report

FRAUD EXAMINATION REPORT

TO:        Sandy Daytrip, Finance Director, Widgets International, Inc.

FROM:         E.T. Phone Home (Team), Safe-T-Accounts, Inc.

RE:        Examination of Widgets Are Us

DATE:         December 12, 2015

________________________________________________________________________

1. Background

        Safe-T-Accounts which is an independent audit firm, was hired by Widgets International Inc. to perform an audit of several of its authorized dealers as a report from the European office stated that a batch of US only widgets was found being distributed in Belgium. The widgets found in Belgium were identified as US only based on packaging. The US product in the European market costs less than what Widgets International, Inc. sells them for in Europe.

        Safe-T-Accounts was hired to identify the source of the unauthorized distributions to make sure that the terms of the dealer agreement are being met by such dealers. Safe-T-Accounts tasked the team E.T. Phone Home to audit Widgets Are Us, who is an authorized dealer based in Atlanta, Georgia.

1. Executive Summary

1. Scope

        E.T. Phone Home was tasked to inspect and audit all pertinent Widgets Are US documents, reports, and property in Atlantic, Georgia within the time frame of 2012 and 2013. Duties performed within the audit included interviews and site visits that were to be completed in a thorough and timely manner at a date set by December 14, 2015.

1. Approach

        E.T. Phone home reviewed the company background information on Widgets International, Inc. and on Widgets Are Us. Next we looked at the Widgets International, Inc. Dealer Agreement, Consumer Rebate process flowchart, Purchase vs. Sales Quantity Report and the Purchase vs. Sales Report with Customer Bonus Paid.

        We interviewed _____________, _____________ onsite in Atlanta, Georgia. Among questions asked we were able to obtain ___________ documentation regarding ____________. Other documentation provided was _______________. A later interview was performed on _______ in which we _____________.