Fraud Examination 5th Edition by Steve Albrecht,Chad Albrecht,Conan Albrecht, Mark Zimbelman

Exercise 36

Steve Stevenson had noticed that the contracts for custodial work for the schools in the district in which he worked had almost all been going to the same custodial company, Johnson Cleaning, and it seemed to just barely manage to be the lowest bidder on each of the bids it had won. He was especially concerned because now it was charging more than it had contracted for and the budget for custodial work was starting to be stretched. Something seemed fishy, but he didn't want to jump to any conclusions. John Johnson, who also works for the district, handles the bid process. Steve thought that he might go and ask if he knew anything about what was going on. He should have some ideas since his cousin owns Johnson Cleaning. What might be an explanation for what Steve is seeing