3. Case: Khalil Jamal is a purchasing manager for Frontyard Books. Frontyard, is one of the country's
leading producers of textbooks for the college and university market. Frontyard's purchases
average about $75 million annually, consisting mostly of paper stock and covering used in the
manufacturing process. The purchasing function is principally handled by three purchasing
agents. Khalil Jamal is the purchasing manager and has two other buyers who report to him. All
internal fraud matters within the company are referred to Samir Ahmad, a Certified Fraud
Examiner. On January 28, Samir received a telephone call from an anonymous caller. The caller
claimed that he was a "long-term supplier to Frontyard in the area of books and sundries, and
magazines. The caller said that since Khalil Jamal was appointed as a purchasing manager for
Frontyard several years ago, he has been systematically "squeezed out" of doing business with
Frontyard.
Required:
The first three steps of the scientific approach used by forensic accountants are:
(a) Define the purpose (or problem)
(b) Form a hypothesis
(c) Gather evidence to test the validity of the hypothesis (Evidence-gathering techniques
commonly include: direct observations, interviews, structured activities, financial statements
analysis, statistical analysis)
Suppose that you are Samir Ahmad (the forensic accountant assigned to this case in order to
determine any potential fraud). Describe how you would perform the first three steps