Need your Suggestions..

I need your suggestions on a Particular Problem For a Company which is under the  IT scrutiny..

The Scrutiny is for Year 07-.08 ,the nature is so general..the company has included in its balance sheet a payable item of 408000 which is a bogus one. The officer on first stage of scrutiny has cleared the  payments like salary ,wages.etc..but on the second sitting they ask for the CONFIRMATION letter from all creditors and debtors. the company on  whom the bogus bill named refuses to provide the  cionfirmation letter..

so you as the auditor needs to suggest the differnt ways the amount can be sett off.. 

or

the requirements oif the IT officer in such A case..

pls give your suggestions...