The Auditor

The warehouse is just outside of Chicago, which seems ironically fitting for a place that’s probably been committing fraud for over a decade. The place itself isn’t flashy, which has probably allowed it to fly under the radar better. Not that flying on the radar would be difficult, what with the information that Barnabas Laski has seen in the past two days.

“You’re sure you’re ready?” he asks Verity as they take the elevator up to the offices.

She nods. “Yeah.” It sounds half convincing.

“We might not find anything.” They probably will, but Nab doesn’t want to admit that to himself yet. It’s easier to keep believing that their boss isn’t committing fraud. He probably is, but that’s a problem to be resolved once they have a proper answer to this.

“I know.” Verity nods shakily.

“Okay.” Nab takes a deep breath as the elevator doors slide open. “Let’s do this.”

***

2 days earlier

Nab’s train of thought is scattered before his cellphone goes off. One more distraction won’t do any harm—and anyway, that’s the classical music he has saved for Verity. Shoving away from his desk, he grabs his phone and answers it.

“Hey, Verity, what’s up?”

“Nab,” Verity says quietly, her words quick. “I’m certain that something is going on now.”

“Wait—with that audit that you’re doing?”

“Yes.” Verity hesitates. “Nab, I told you about all of this, right? I’m auditing this distribution center?”

“Yeah, you told me about it. Go on.”

“Okay, so … I don’t want to jump to assumptions too quickly. There’s not a lot to go on right now. But it feels wrong, and I know that you tell me to trust my gut. I just don’t want to make accusations where anyone could hear them. If someone does hear me, and I’m wrong, I don’t want to risk my job that way. I can’t lose this job. So I just need to make sure that this is actually happening before—”

“Ver,” Nab interrupts. “Calm down. It’s okay. Just tell me what’s happened.”

“Okay. Um, where are you right now?”

“In my cubicle at the office. Half of the people are at lunch right now. It’s pretty quiet.”

“Okay,” Verity says. “So …”

Nab leans back in his chair, propping one ankle on his knee. “Verity, it’s okay. Just say it, okay? Auditing is terrifying sometimes, I know. It’s okay not to have the answers yet.”

“Okay. Okay.” Verity takes a deep breath. “I’m still in Chicago—after that audit for Scott Electronic Distribution. I told you already that I met with Mr. West for the first time, right? He’s their assistant manager or something like that. He just seemed … slick. Wrong slick, not professional slick. But I just figured that’s what he’s like, so I went ahead with the audit. And it just—it feels wrong.”

“How so?”

“Their profit margin is 42.5%, Nab.”

“What the—” Nab straightens, dropping his foot to the floor. “I don’t think I’ve ever audited a distributor with a profit margin that high. Or anyone else, for that matter.”

“That’s what I thought. So I looked at their financials, ran the numbers, everything—it all looked correct. They had receipts to back it up and everything. I checked pretty much everything. I went with them to their warehouse, too, and that’s just … that’s where I think it felt the most wrong. According to their financials, there should have been $20 million of inventory inside that warehouse.” She takes a deep breath. “I’m not an expert, Nab, but I did work at a warehouse before college. They had electronics there, too—similar kinds. And …”

“Go on,” Nab says after a moment.

“I would swear that there’s far more inventory than just $20 million. I’d—I’d guess something like $30 million. Maybe a bit more.”

“What the—” Nab says again. He shoves back from his desk and stands up. This isn’t a sitting-down conversation. “It could just be an error, right? Different products than you worked with during your time?”

“Yes, it could. And I don’t want to jump to assumptions. But I don’t like it, Nab. Mr. West seemed so confident about everything, and he told me about how they’ve never had trouble with their audits before. I just—well, I don’t know what to think. And—Nab, I honestly don’t want to disrespect my boss, but I just don’t feel comfortable calling Mr. Reed to ask about this. He’ll just tell me that it’s all right and to go ahead with the audit anyway. And his wife is still in the hospital, and there’s so much happening in his personal life right now …”

“Okay,” Nab says. “Sure. But that’s just … well, that seems like a big error. If it is one.”

“I know. Because it’s one of those problems where an error would just ripple through the income statement. If they’ve miscounted their ending inventory and misstated that, then their cost of goods expense will be too low, right? And that’ll mean that with less expenses, more income. And that would explain why their profit margin is so high ...”

Wow, she’s quoting second-year accounting principles at him? She must be really stressed out.

“Okay,” Nab says after a moment. “What do you want to do?”

“I don’t know. I don’t have access to the financial records right now. Can you look it up for me? See if they’ve ever had issues before with their audits.”

“Of course. I’ll text you later, okay? We can meet up for dinner somewhere and talk about it.”

“Okay. Thank you, Nab.”

“No problem.”

***

Verity slides into the booth across from Nab in a frazzled mess. Honestly, that’s kind of the norm since Nab has known her. She’s still very much a newbie at this whole auditing thing, and there’s a Midwestern determination to everything that she does. Nab’s only five years older than her, but he’s seen enough young auditors come and go in his time with the firm. Verity has just enough grit to be sticking it out here, despite her low seniority resulting in lower paychecks and worse assignments. Now her shirt is wrinkled, her hair is escaping her bun, and she’s still towing her suitcase.

“Thank you, again,” she says, adjusting herself with a nervous energy. “I—”

Nab holds up a hand. “Get your breath first. You look like you flew here yourself rather than on a plane.”

“I know, it’s just—” She takes a deep breath and smooths the loose wisps of hair back. “Nab, I don’t like this. You texted and said you have a bunch of … findings?”

“Sort of. Lack thereof, really.”

“What does that mean?”

Nab opens his laptop, pulls up a screenshot from his files, and spins the screen to face Verity. “When I pulled up the center’s audit from 2022, this is what it was.”

“A loading screen?”

He reaches over to tab to the next screenshot. “And the 2021 audit.”

“Did they all just … not load?”

“And here’s 2020 … 2019 … 2018 …”

“They’re all blank, Nab.”

“Exactly.” He spins the screen back to face himself. “I went into their records and tried to find the audits, but not one of them loaded. I tried everything. Turning the computer off and on again, closing all the applications, unplugging it, rebooting everything multiple times—and nothing worked. I even tried another terminal. As far as I can tell, the audits from this distribution center just … don’t exist in the system.”

“How?”

“No clue.”

“Do you know who audited? The other years?”

“No. We’ve audited them since 2012 apparently, so going by the three-year rule, you must be at least the fourth auditor to work with them. The records don’t exist for any of those years. Did Mr. Reed tell you about any past auditors or audits when he gave you the assignment?”

Verity hesitates, then shakes her head. “I feel like he did, but I can’t—I can’t remember anything.”

“Did he email you any information?”

She opens her phone and starts scrolling through her inbox. The light of the screen on her face deepens the lines and makes her look older. She looks up at last, shaking her head. There’s a dull, determined glint in her eye that wasn’t there a minute ago. “No. There’s nothing. But I remember him telling me something about this distribution center when he talked to me in person, before I left. I just can’t remember what he was talking about. He must have mentioned some other name. He must have.”

“Okay.” Nab sits back, considering. “We need to find out whether or not those records exist.”

“But we can’t just ask people without … you know … alerting them to what we’re doing.”

“Of course not. Can you ask the distribution center for their copy of the audits?”

“I did, but I wasn’t able to get them. I was just talking to the Mr. West I mentioned—the assistant manager. Their district manager—the one that’s supposed to handle that sort of thing normally—she wasn’t there. Mr. West said she was out of town to be with her sister who’s not well.”

“Okay … well, we can ask Mr. Reed.”

“I don’t …”

“Or we could keep looking up the records on computers where they don’t exist.”

“Yeah.” Verity turns off her screen and nudges her phone to align it with the edge of the table. “Okay. Yeah. We need to talk to Mr. Reed.”

***

Nab doesn’t sleep very well. He winds up rolling out of bed, turning on a lamp, and pulling one of his old accounting textbooks out of the closet. He flips through, rereading, as though that’ll tell him anything. He keeps pausing on the pages about ethics, though. They definitely seem more relevant right now.

He’s almost late getting to work the next morning, and he doesn’t even have coffee. Verity looks worse, if that’s possible. They walk into each other on the way to get coffee. Verity rebounds, apologizing.

“Did you sleep?” Nab asks her, grabbing her arm to steady her.

She shrugs noncommittally. “I was nervous.”

“It’ll be okay.” Nab starts filling his mug. “Did you see Mr. Reed yet?”

“No, I—” She pauses, looking over Nab’s shoulder.

“Did you need something?” Mr. Reed asks.

Nab turns around fast enough that he nearly spills the coffee he just poured. Nearly. But he doesn’t, so that’s good. Mr. Reed is just standing there, smiling vaguely in his businessman way. Nab quickly sets down his mug of coffee. He hasn’t thought about this conversation enough. It’s a good thing that Verity’s the one who has to have it.

“Oh,” Verity says. “Um. Good morning, Mr. Reed. I—I, um … had a question, about the audit I just did.”

“A question?” Mr. Reed raises his eyebrows.

“I wanted to check some of the numbers,” Verity says, like she’s trying to taste each word before she says it. “Because … they seemed off. But when I went to look up the past audits, the records didn’t seem to exist. I was just wondering who did the audits in previous years so that I can … you know, check with whoever it is.”

Mr. Reed’s lips purse and his eyes narrow. “Hm. The records don’t exist, you say?”

“Yes. I tried to find them this morning, and it’s like the data got removed somehow. I’m just trying to figure out what kind of error—”

“Who was the audit for, again?” Mr. Reed says, cutting in.

“Um, Scott Electronics Distribution Center. It’s just outside of Chicago.”

“Ah, yes. Excellent place. I really have no answers for you on why the audits aren’t showing up in our records. I assure you that they were quite in order in past years, because I did those audits myself. Everything was in order.”

Verity glances at Nab. There’s a hopeful tilt to her head. Nab looks down at his coffee mug, not wanting to meet her eyes just then. The back of his neck is prickling for some reason.

“Okay,” Verity says, turning back to Mr. Reed. “Thank you. That’s good to know.”

“I’m glad to hear that.” Mr. Reed steps up and starts filling his own coffee mug.

“How’s your wife, by the way?” Verity asks. “Is she feeling better?”

Mr. Reed slowly stops the coffee, and nods. “Ah … yes. A little better. Thank you for asking. Her sister actually came to see her two days ago, and I think that helped her improve faster.”

“Oh, that’s really good.”

Mr. Reed nods. “Well, I must be going. Let me know if you have any further questions.” He disappears down the hall.

Verity turns to Nab. “That’s really good, you know? Family sticking together and helping each other. It’s nice to hear about that kind of thing.”

Nab is lost in thought and doesn’t properly hear her. He picks up his mug, stops, and puts it back down again. “Ver, didn’t you say that the district manager for the distribution center wasn’t there because she was visiting her sick sister?”

“Yes … oh.”

Nab abandons the coffee and grabs Verity’s hand, towing her ten feet down the hall to the elevator. He waits until they’re inside and the doors have closed before he turns to her and says, “That’s way too weird to be a coincidence. The district manager went to see her sick sister, and Mr. Reed’s wife’s sister came to see her. And if I was hearing Mr. Reed correctly, he didn’t mention anyone else who ever did the audits for that place. Which implies that he was the only one. And he shouldn’t be the only one. They’ve been audited by us since 2012; that’s way more than the three-year limit for an auditor working with a business.”

“Do you think Mr. Reed is lying about the audits being okay?”

“I think he did them for twelve years for his sister-in-law. And I think that if you’ve uncovered some kind of way-overstated inventory at that same place—whose audit records seem to be erased—that’s too many coincidences.”

“But why would Mr. Reed do that?” Verity says.

Nab shrugs. “No idea.”

“Fraud,” Verity says. “It needs opportunity, rationalization, and pressure. He—he would need to have some kind of pressure that would make him do this.” She’s practically pacing now, within the small confines of the elevator. “Pressure … what would it be … oh!” She turns to him. “Nab, his wife. His wife has been sick for years. That’s why the sister came. When I first asked him about his wife, he told me that she’d been sick for more than a decade. That takes money, and if he’s getting something out of this audit …”

“Which means it would have been going on this whole time,” Nab says grimly.

Verity nods.

“Theoretically,” Nab continues, “they could overstate their ending inventory once every two years. And in the off years, it would automatically correct itself. Sure, their shareholders will be confused as the stocks fluctuate like that. But as long as it keeps not being caught—and Mr. Reed can see to that—it’ll keep working.”

“So it keeps happening …”

“And the effects keep rippling through the income statement into their net income.”

“But why would the district manager …?”

“Probably to get a bonus for increasing the net income. In the off years, I don’t know what she does—probably makes an excuse somehow. And they can throw a normal year into the middle somewhere to throw off anyone who’s suspicious, looking at stock trends.”

“We have to call the police,” Verity said. “But we don’t have proof yet …”

“Mr. Reed probably just lied to us. We need someone else.”

The silence stretches on. Somewhere, someone must have called the elevator, because it starts moving downwards. As it stops again, Verity turns to Nab.

“Well, we could go back to Chicago and see for ourselves.”

***

Nab had very few plans for the weekend, but what actually happens didn’t factor into those plans. Before leaving work that day, they tell Mr. Reed that they’d like to take time off since there’s nothing pressing going on the next day. Mr. Reed smiles in a fatherly way—he probably thinks they’re a couple now, but whatever—and says that of course they can go. They retreat to their respective apartments, throw belongings together, and make it to the airport in time to get through security and onto their flight.

It’s insane and surreal, but it’s very much happening.

They rent rooms at a seedy motel not far from the distribution center. Nab doesn’t sleep well for the second night in a row. Part of that is because he’s keeping an ear out to make sure that Verity’s okay in the next room over.

The next morning, shortly after 9:00 a.m., they head for the distribution center. Verity talks her way through the front desk, explaining that they’re from Reed & Josef and that she wants to meet with the district manager for some follow-up questions from the audit. The receptionist is a seventy-year-old woman who looks like she owns about four cats. She wearily directs them to head up to the third floor, then returns to her sudoku.

***

The third floor is a hallway full of offices—vaguely pine-scented—with a vacuum cleaner whirring somewhere. One-ended phone conversations are audible as Nab and Verity walk the hall’s length toward the office that’s marked as belonging to the district manager: Miss Sophia Lansbury.

There’s another secretary who seems slightly more engaged as he checks Miss Lansbury’s schedule and informs them that they can meet with her for fifteen minutes.

He stands up to crack open the door to the office proper and say, “Miss Lansbury—auditor’s here to see you.”

Miss Lansbury appears a moment later. Nab’s stomach sinks when he sees her. She looks an awful lot like the woman in the photo framed on Mr. Reed’s desk. He did some searching yesterday, and he knew that Mr. Reed’s wife’s maiden name is Lansbury, and that the district manager’s name is Lansbury. But it still feels wrong. She’s maybe fifty, graying hair pulled away from her tight face. She eyes Nab and Verity with something that Nab’s pretty sure is confusion.

“Do come in,” she says at last. “We can discuss whatever you need.”

Miss Lansbury’s office is pretty nice, honestly—a tasteful desk and chairs, a few potted plants, and a nice computer screen layout. If Nab ever gets his own office, he might do something similar with it. A few district managers that Nab has seen—okay, actually, more than a few—tend to surround themselves with pieces of their success. Miss Lansbury doesn’t look like that type.

“I’m sorry to have missed you when you were here earlier this week,” she says, settling herself behind her desk. “Remind me of your name?”

“Verity Williams,” Verity says, taking one of the chairs on the opposite side of the desk. “And this is my friend, Barnabas Laski, also from Reed & Josef. I just wanted to come and ask some questions to follow up on my audit.”

Miss Lansbury regards her coolly. “Was the audit not satisfactory?”

Verity pauses. Then she says, “I can explain all of that in just a moment. By the way, are you by any chance related to Gianna Lansbury Reed?”

Miss Lansbury flinches slightly. “I am; she is my sister. That’s hardly relevant though. Did you have a problem with the audit?”

“I’m looking into a few things.” Verity’s face is relaxed, with a half-smile left there, despite the sharp edge to Miss Lansbury’s question. Good for her. Nab’s told her more than a couple of times that she needs to make sure that her face stays as professional as her words when she’s working. “Specifically, I’d like to see your record of the audits that were done in previous years.”

“Those are all in order.” Miss Lansbury doesn’t move.

“Can I see them, please?”

“If the audit is satisfactory, I don’t see why you would need to. Aren’t you just a recent hire, anyway?”

Verity’s hands tighten on her lap. “Yes, but that’s—”

“There’s no reason to worry about it. You really came all the way here just because you think there’s something wrong with an audit that was already finished? And you came with your … friend? For what, moral support? Was Mr. Reed not able to assure you that everything is in order?”

Verity opens and closes her mouth. “Ma’am, I’m following up—”

“—on an audit that was already finished.”

“Miss Lansbury, the records for your audits seem to have been erased from Reed & Josef’s files,” Verity says firmly. “I need to access yours, here, because I have reason to think that some of the numbers on your income statement are incorrect.”

“They’re correct,” Miss Lansbury says coldly. “Mr. Reed himself does our audits, consistently—except that now it seems he’s sent an over-zealous intern.”

Absolutely not. Nab’s not going to stand for that.

“Miss Lansbury,” he says, before she can go on. “That’s the problem, actually. I don’t know if Mr. Reed told you, but an auditor is only allowed to audit the same company three years in a row. That’s to keep the auditor and company from getting too friendly. It looks like you’ve been audited for far more than three years by the same person. And given that you’re Mr. Reed’s sister-in-law, that doesn’t make your situation better. We need those records so that we can see exactly what Mr. Reed signed off on those years, and what he was approving. Otherwise, this doesn’t look very good on your end or ours.”

Miss Lansbury’s posture becomes rigid. “What are you saying?” she snaps. “Did you come here to threaten me?”

“No, ma’am,” Nab says. “Just to make sure that this audit is done right.”

“And what, pray tell, would not be done correctly?”

“Your ending inventory,” Verity says. “It seems to be overstated. I’ve seen your stock prices over the years. They fluctuate a lot. There’s been less-than-average growth overall in the past decade, but sharp growths and declines in individual years. That indicates that something is happening. And given that you don’t even have seasonal sales, I’d like to know what’s causing that.”

“Are you accusing me of fraud? Because I do know a few things. And it is not an auditor’s job to look for fraud.”

“That’s right,” Nab says. “But we could get a fraud audit team in here, if necessary. Is there a reason you won’t let us see those audits?”

“You have no right—”

“I can’t let fraud happen, Miss Lansbury,” Verity interrupts quietly. “If it’s happening, I have to report that. No matter what it means for me, or for you.”

“It means more to me than to you.”

“So there is something going on,” Nab says. “Ver—we should—”

“Don’t think about leaving,” Miss Lansbury says. “I have security guards that I can tell to stop you. I can tell them that you’re a threat. Imposters.”

“Why?” Verity says. “If you want more money—I assume you’re doing this for the money?—then why don’t you just do it normally? Legally?”

“Because I need it now,” Miss Lansbury says hotly. She’s still sitting, but her face looks like it’s carved from stone. Cracking stone, Nab thinks. “My sister, Gianna, was diagnosed with an illness so rare it didn’t even have a name. They’ve tried everything. For years. Nothing worked. And it’s all so expensive, and you need money to fund a thing like that. And her husband didn’t have enough money to keep paying for treatments, so of course I told him I would help. An overstated inventory a few years out of the past twelve led to promotions, to raises—that funded the treatments, for the most part.”

“You’re doing this for your sister?” Verity whispers.

Miss Lansbury nods. “Not for myself. I’m not that greedy. Or insane.”

“So you won’t let us go, because …?” Nab sweeps his hand out. “The game’s up. You’re done.”

“I just need a little longer.” Miss Lansbury’s voice cracks as she says that, and she swallows hard. “I need the money to fund those treatments. Just a little longer. Then I’ll stop with this … operation.”

“But it’s fraud,” Verity says. “And we have to report it.”

“You won’t be leaving, then,” Miss Lansbury says firmly. “I won’t—”

“You can’t lock us up,” Nab interrupts. “Even if you can get enough money to pay for whatever’s going on right now, it won’t end there. There’ll always be more costs. You don’t have a way to get away with this, and we’re going to the authorities.”

“I’ll do anything—”

“You won’t do anything. I typed up all of our suspicions and put them in an email that’s primed and ready to send to fifty people that I know tonight. If you don’t let us go, it’ll get sent, and you’ll get caught anyway.”

“I can get someone to disable that.” Miss Lansbury’s voice is strained.

Nab shakes his head. “But how are you going to find a burner email address created on a computer that isn’t mine? There’s no way to do that. Not in the time that you have.”

Miss Lansbury slowly looks from Nab, to Verity, and then to her desk. She buries her face in her hands.

Verity turns to Nab. “I’m thinking it’s time to call the police.”

Nab nods. “Yeah.”

Verity hesitates. Then she steps around the desk and puts her hand tentatively on Miss Lansbury’s shoulder. Gently. She’s got that determination, but she’s also got kindness. And that’s a good thing that Nab doesn’t see in enough people. “Ma’am. I—I understand, why you did this. And I understand that you feel like there was no other way. We’re going to do what we can for your sister, okay? We want her to be all right.”

Miss Lansbury nods, raising her tear-stained face. “Gianna means the world to me. And to her husband. All I wanted was the best for her.”

“I know.” Verity gives her a faint smile—a real one this time—and returns to Nab. “Okay. I’m ready to do this.”