Business Case Study: Koss Corp. Case

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Koss Corporation is one of the leading companies in making stereo headphones, and other related accessory products. The company was found in 1953 and its headquarter is in Milwaukee, Wisconsin. The company has manufactured the high quality headphones, Bluetooth speakers, computer headsets, noise canceling headphones, and other entertainment products in the United States that were sold at some stores nationwide. Koss’s products were widely accepted by consumers in early 1960s because of the baby booming generation during that period. Its sale and profit grew significantly with profit after tax at around 10%. Koss Corp. was published 1967 with sales around $1 million. Koss Corp’s earning was declined during 1970s and 1980s. It recovered its sales lately in 1990s after changing the management…show more content…
As a part of public traded company, Koss was required to have an audit financial statements filed with SEC and released to financial users. The purpose of audit procedure is to give a reasonable assurance on company’s financial reports and detects material misstatement to protect the company’s assets. However, Koss Corp. faced the big embezzlement, which was discovered in 2009 by the fraud of Vice President of Finance, Sujata Sue Sachdeva who worked for the company from 1989 and Julie Mulvaney, a Senior Accountant who helped her in this fraud scheme. Sachdeva started her career as a temporary position and was promoted to Vice President of Finance within a year. Sachdeva stole over $31 millions from company’s account during five fiscal years from 2005 to 2009. To perpetrate into the fraud, Sachdeva authorized at least 206 wire transfers from Koss bank accounts to pay for her American Express credit card bills and issued over 500 cashier’s checks from company accounts to pay for her personal expenses. Sachdeva and Mulvaney easily stole company’s assets because they are both doing bookkeeping and reconciliation. Sachdeva always replied on Mulvaney’s reconciliation and both

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