Subject category:
Finance, Accounting and Control
Published by:
Allied Business Academies
Length: 6 pages
Data source: Published sources
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https://casecent.re/p/156168
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Abstract
This case provides a practical example of occupational fraud. Losses suffered by small business due to fraud are disproportionate to larger companies due to lack of internal controls. Specifically, it examines the methods of how a human resources/accounting manager of a manufacturing company managed to embezzle more than USD250,000. The unwitting victims of this scheme were the two principal owners who were engineers by trade and typical of most small business owners who focus their efforts on generating their product and maintaining customer relations. Essentially, the owners left the oversight of the day-to-day operations to their 'trusted' employees. The primary subject matter of this case is occupational fraud and lack of internal controls in small privately owned companies. Secondary issues include multiple components of asset misappropriation, employment screening, due diligence, and indicators or 'red flags' to possible fraud. This case is targeted for students in a forensic accounting course to provide practical discussions on internal controls, accounting for the loss, and solutions to minimize occupational fraud.
About
Abstract
This case provides a practical example of occupational fraud. Losses suffered by small business due to fraud are disproportionate to larger companies due to lack of internal controls. Specifically, it examines the methods of how a human resources/accounting manager of a manufacturing company managed to embezzle more than USD250,000. The unwitting victims of this scheme were the two principal owners who were engineers by trade and typical of most small business owners who focus their efforts on generating their product and maintaining customer relations. Essentially, the owners left the oversight of the day-to-day operations to their 'trusted' employees. The primary subject matter of this case is occupational fraud and lack of internal controls in small privately owned companies. Secondary issues include multiple components of asset misappropriation, employment screening, due diligence, and indicators or 'red flags' to possible fraud. This case is targeted for students in a forensic accounting course to provide practical discussions on internal controls, accounting for the loss, and solutions to minimize occupational fraud.