Internal auditors spend their days examining risks, testing controls, and investigating anything that doesn’t look quite right. Sometimes they uncover sophisticated fraud. Other times, the details are so strange that the stories stay with them for years.
From a $9 improper expense filing that cost someone a job to 150 tons of missing boiler fuel, these true stories show that internal audit can uncover some extraordinary human behavior.
The following six accounts are drawn from published interviews with internal audit professionals and documented investigations. They show that the most memorable audit findings aren’t always the largest. Sometimes, it is the sheer oddness of what people do—and what they think they can get away with.
1. The Executive’s Missing Document—and the Auditor’s Mark
In a case detailed in Fraud Magazine, an internal audit at a financial institution uncovered evidence of misconduct involving a bank CEO known for cutting corners to boost earnings.
Among the allegations was that the CEO had arranged to sell a company car to his housekeeper at a steep discount. When internal auditors asked him to produce the bill-of-sale document, he claimed it had been misfiled.
Anticipating a cover-up, a colleague on the audit team quietly marked the bottom-right corner of the top page of the blank bill of sale—that just happened to be sitting on the CEO’s desk—with a subtle pen marking. The CEO said he would look for it and asked the internal auditors to come back later. That afternoon, the executive returned with the supposedly misplaced document. It was backdated, listed a full-market price, and bore a notary’s signature—along with the auditor’s mark, added just an hour earlier to the bottom right corner of the cover page.
The executive had doctored the document while the internal auditors were watching, inadvertently preserving proof of the forgery.
The situation proved even more troubling when senior management and the board refused to act against the CEO, who ran one of the bank’s most profitable divisions. The CEO eventually departed after details of his expense-account misconduct hit the media, but not before the bank elevated him to vice-chairman, allowing him to retire with his stock options.
The marked document remains a bizarre detail, but the larger lesson is sobering: even compelling evidence matters little if those responsible for governance refuse to act.
Source: Fraud Magazine, “Why Audits Fail,” March 2020.
2. The Internal Auditor Who Took the Blame
Mike Jacka, a former internal auditor at Farmers Insurance, recalled an awkward encounter in a 2025 column for Internal Auditor magazine.
Before traveling to audit a local insurance agency, Jacka called the division manager to outline his plans to discuss some sensitive audit findings, expecting the manager to notify the leadership team so they could discuss the findings together afterward.
However, the division manager never informed the more senior executive. When Jacka arrived, the executive was furious about being caught off guard and berated her subordinate for the communication breakdown.
Jacka could have easily defended himself by explaining that he had notified the division manager in advance and expected him to communicate upward. Instead, he accepted the blame for the communication breakdown himself and promised to prevent it from ever happening again.
His rationale was purely practical: correcting the record in front of the executive would have directed her anger at the division manager standing right beside them. By taking the hit, Jacka de-escalated the situation and built long-term goodwill with the manager.
While not a fraud story, it illustrates the human dimension of internal audit. Beyond maintaining independence and objectivity, the job requires sharp interpersonal judgment to know when raising a dispute is actually worth it.
Source: Mike Jacka, “Mind of Jacka: Take the Hit,” Internal Auditor, March 14, 2025.
3. The Whistleblower Who Reported Being “Too Old”—on the Fourth Floor
Tom Keaton, director of internal audit at Crown Castle, recalled a particularly unhelpful anonymous hotline report during a 2025 interview with the Institute of Internal Auditors (IIA).
The complaint alleged that an employee had been told they were “too old.” Asked where the incident occurred, the complainant simply answered: the fourth floor, with no additional details.
There was just one problem: the company had offices nationwide, many with a fourth floor. The report did not identify the individuals involved, provide a date, or explain what had happened. Keaton’s team attempted to gather additional details through the anonymous reporting portal, but the complainant never responded.
Without further information, the team could not launch an investigation. While the allegation may have described genuine age discrimination, there was simply not enough actionable evidence to pursue it.
It serves as an amusing example of a serious challenge in internal audit: a hotline can surface important misconduct, but even a legitimate complaint requires sufficient detail to be actionable.
Source: The IIA, “Fraud Analytics in Investigations,” featuring Tom Keaton.
4. The $9 Expense Report that Ended a Second Chance
Keaton also recalled an employee whose expense claims were chronically disorganized and error-prone. Following an internal audit investigation of improper expenses filed by the employee, the team concluded that the issues stemmed from mistakes and waste rather than intentional fraud. The employee was permitted to repay the funds, and the matter appeared resolved.
About a week later, Keaton learned that the employee had been fired.
The reason? The employee had done it again—this time over an expense claim of just $9. While the amount was trivial, the timing was not. Having just been questioned and given a second chance, the employee repeated the exact same behavior almost immediately.
The episode stuck with Keaton because it illustrated a common internal audit phenomenon: the assumption that a minor violation won’t matter, even after the organization has clearly established the consequences.
Sometimes, the most revealing transaction isn’t the largest. It’s the one proving that nothing has changed.
Source: The IIA, “Fraud Analytics in Investigations.”
5. The Plant Missing 148 Tons of Fuel
A milk-processing plant in India reported in documents to have 150 tons of eucalyptus leaves and husks on hand to fuel its boiler. When a new plant head checked inventory records and went to inspect the stock, he found only two small heaps.
Neither the head of engineering nor the boiler manager could provide a clear explanation. When the internal audit team began investigating, critical records were missing.
A forensic audit revealed a widespread trail of suspicious activity: 21 months of manual registers had vanished, the boiler storage yard’s surveillance camera had been broken for over a year, and the boiler manager’s laptop was missing approximately 40 percent of its data. Investigators also noted unusual fuel-consumption spikes, frequent phone calls between the boiler manager and the supplier during purchasing periods, and multiple vehicles registered under the same identification number.
The investigation ultimately exposed a scheme between the engineering head, the boiler manager, and external vendors to manipulate fuel supplies for financial gain. Investigators also uncovered evidence of kickbacks paid to the boiler manager by maintenance vendors.
While the missing fuel provided an extraordinary starting point, solving the case required combining physical observation with transaction analysis, digital forensics, and procurement reviews.
Source: Anuj Choudhary, “The Case of the Missing Boiler Fuel,” Fraud Magazine, May 2024.
6. Four Employees, One Fraud—and a Newly Acquired Business
After a publicly traded Fortune 500 company acquired a new division to expand its operations, it began integrating the business into its existing control framework. During integration, internal audit uncovered a fraud scheme exceeding $500,000.
The alleged co-conspirators went far beyond a single employee with access to the books. The group included an hourly line clerk, a human resources clerk, an administrative assistant, and the human resources manager.
The collusion was striking given that the employees held distinct roles that normally provided a clear separation of duties.
The case, documented by Dan Edelman and Jana Owens in Fraud Magazine, was shared by the company’s internal audit director (with names and details altered to protect confidentiality).
The episode highlights a critical risk in mergers and acquisitions: an acquiring company may trust its standard internal controls, but those controls may not yet be functioning in the newly acquired entity. When employees collude, controls designed around individual accountability quickly fall apart.
Source: Dan Edelman and Jana Owens, “Collusion in the Workplace,” Fraud Magazine, May 2014.
The Human Factor Never Goes Away
These stories span anonymous hotline tips, suspicious expenses, document tampering, missing inventory, collusion, and office politics. While the details vary, the underlying lesson is constant: organizations are run by people, and human behavior is inherently unpredictable.
Internal auditors can leverage advanced analytics to identify patterns, review full transaction datasets, and spot anomalies. Yet technology alone cannot solve every case. An auditor still has to ask why 148 tons of fuel are missing, why a misplaced document bears a mark created an hour ago, or why an employee repeats an offense immediately after receiving a warning.
Ultimately, the most memorable audit finding isn’t always a multimillion-dollar scheme. Sometimes, it’s a $9 expense revealing that a second chance changed nothing at all. 
Joseph McCafferty is editor & publisher of Internal Audit 360°.