Accounting Case Study: An Accountant's Rotation Of Accounting

Case study

An accountant worked at two accounting firms in an extent of six months. She gambled online very regularly.

She was employed in the tax department of both of these firms, and negotiated issues related to tax, that clients had in their institutions.

In some occasions, the client`s payment of tax, needs to be rightfully decreased. The accountant has the authority to submit claims to reduce tax payments on behalf of her clients.

If their tax has already been paid, the government department that administers and gathers tax in the United Kingdom, (Her Majesty`s Revenue and Customs tax) repays the overpayments, when a claim is made by an accountant in a firm.

In a three month span, in the first firm, certain clients were informed that

Instead, she stole additional cash from the clients. The fraud and theft executed, was a consequence of weak internal and accounting controls of cash,in both of the accounting firms. Rotation of duties should have been enforced, when submiting claims, so that each employee in charge of this, knows the clients that claims are proposed for,and whether the claims are legitimate and valid. This way, diversion of cash by means of personal bank accounts will be exposed and revealed as well. Also, there should be a division of duties, where before claims were submitted to the government tax department, they are examined by an executive of the firm. Credit cards and confidential credit card information of not only clients but anyone in the firm should not be given to accountants or other employees, unless they are under

The general manager at the cafe, used sales skimming, where she overcharged customers, pocketed and embezzled the extra cash, but recorded sales in their initial amounts. Apart from diverting client`s cash into her own bank accounts, the accountant in the second case, stole money from credit cards, that she held for her job. She did this without any approval or initiation from the credit card owners.

In both the cafe and the accounting firms, controls of accounting are inadequate, and the employees who carried out fraud in both cases took advantage of this. Therefore, white collar crimes have taken place in both cases. But, there were more flaws in the accounting controls of the cafe businesss, than that of the accounting firms.

One of the main internal controls of cash, that is deficient in both establishments, is the division and rotation of duties. If they were implemented, sales skimming, fictitious records and illegal diversion of cash could have been