1. Describe methods that Smith and Jones could have used to steal $34 million in cash over 12 years under KOSS's existing internal control system. The second bullet from the AAER is significant. It states "While Koss’s internal controls policy required Michael J. Koss to approve invoices of $5,000 or more for payment, its controls did not prevent Sachdeva and Mulvaney from processing large wire transfers and cashier’s checks outside of the accounts payable system to pay for Sachdeva’s personal purchases without seeking or obtaining Michael J. Koss’s approval." There were various methods Smith and Jones could have used to steal the cash with KOSS's existing internal control system. They include: • Skimming. Because the wire transfers and cashier's checks were outside the accounts payable system (book keeping system), this is indicative of skimming. The wire transfers and checks transactions when posted to the bank accounts are historical and should be identified as part of the reconciliation process. The case states, "...many account reconciliations were either not prepared or were not maintained as part of Koss’s accounting records. To the extent that reconciliations were conducted, they were improperly performed by the same persons who initiated or recorded the transactions (i.e. Sachdeva or Mulvaney)" • Not identified, but certainly plausible with the internal control processes described is the "death by a thousand cuts". Sachdeva and Mulvaney were in position to put through small transactions that may not be detected. This is a cash larceny scheme. • Another cash larceny scheme that could have been committed was reversing transactions or revering entries. By stealing funds, Sachdeva and Mulvaney could have gone back into... ... middle of paper ... ...not have occurred (again the out-dated accounting system shortfall). Further, analytical procedures could be used to compare budgets / forecasts to actual results and variations could be investigated (i.e. expenses higher than anticipated or profit less than anticipated). The following is article by Tracy Coenen is more critical of KOSS' management than of the auditor, Grant Thorton. She contends that while auditor should have caught this fraud, management is more to blame because of not addressing internal control issues. http://www.sequenceinc.com/fraudfiles/2010/01/koss-corp-fraud-defending-grant-thornton-no/ Works Cited https://www.sec.gov/about/laws/soa2002.pdf (page 45) http://www.bizjournals.com/milwaukee/news/2013/07/05/koss-gets-85m-in-settlement-with.html http://www.aicpa.org/Research/Standards/AuditAttest/DownloadableDocuments/AU-00329.pdf
A previous leader of The Sommet Group, Brian Whitfield, was accused and found guilty after a plea of not guilty to stealing money from clients and the government in the amount of $20 million. The IRS believed the estimated money stolen was upwards of $22 million. The federal prosecutor claimed and proved Whitfield had stolen and then used money for his own personal expenses. Although, the case originally indicted Whitfield’s
Electronic confirmations are often used to verify bank balances, but they can also assist in the verification of a company’s vendors. Therefore, I am going to request confirmations from Wayland Manufacturing Company’s vendors after the client accepts my request. The electronic confirmations will prove each vendor’s existence as well as the accuracy of the accounts payable subsidiary ledger balances. Evidence collected from third-party sources must remain confidential and I maintain my integrity by only seeking evidence I am authorized to review. If I decide to request Cash electronic confirmations without consent, I am violating integrity, confidentiality, and professional due care (AU Section 330-The Confirmation Process 1998) (Arens, Elder, & Borsum 2013) (AICPA Code of Professional Conduct
First of all, the whole robbery wasn’t Perry Smith’s idea. Dick Hickock was in jail serving some time. It was there that Dick found out that Mr. Clutter is loaded and has tons of money locked up in a safe somewhere in his house in Holcomb. Once Dick got out of jail, he called Perry and tells
Rita Crundwell was the trusted comptroller and treasurer of Dixon, Illinois with a passion for horses. She took advantage of her trust and responsibility to commit the largest known municipal fraud in the history of the United States. This fraudster has surprised and astounded people around the world by the amount of the fraud and for how long it went. Rita served the small town of Dixon from 1983 to 2012 until sentenced to nearly twenty years in federal prison for embezzling an astonishing $53.7 million. The story of this Dixon Commissioner shocked her small town and is studied by auditors all over.
In a recorded conversation, Williams told Adams he could protect his drug operation, but he needed to bring his partner in on it. In 1994, Davis and Williams provide Adams police protection. The informant Terry Adams delivered about 7.5 kilograms of cocaine to a FBI undercover agent, each officer was paid $500 per kilo. May 4, 1994 two cops, Adams and undercover FBI agent Juan Jackson posed as a New York drug dealer named ‘JJ” he made everyone strip to show that they were not wired.” The cops agreed to hire a uniformed New Orleans police officer to protect the large quantities of cocaine for three days. Davis recommended
During the Simply Soups, Inc. audit, we were responsible for confirming the balances for each of the company’s bank accounts. The purpose of sending confirmations is to obtain a reasonable expectation that the balances presented on the books reflect the actual values recorded by the banks, addressing any issues of existence. In addition to providing validation from a reliable source, confirmations also allow us to reconcile any issues concerning money in transit.
James T. Johnson was a young man who had a good job working as a construction worker. Although, he had a job and worked every day he still lived at home with his mother. Furthermore, he was the type of young man who went to work on time and after work he would come home. Unfortunately, there were occasions where he would go out with a few of his co-workers on a Friday he still came home afterwards. Nevertheless, he was hiding a secret from his mother that later led to him being arrested. Now, rather than James uses his money he had earned from working, he burglarized homes and garages in the communities in his area. After burglarizing these homes he would then sell the items he had stolen via the internet or a pawn shop in two different counties.
There were several people who took about in this heist, and they all had different roles to play. Martin Krugman was the one who started the plot when he told Henry Hill, who happened to be an associates of Jimmy Burke, about millions of dollars that were untraceable. This information came from two workers at the airport Louis Werner and Peter Gruenwald, they were successful in stealing money from their employer, Lufthansa, in 1976. Louis Werner helped throughout the planning process, such as telling them where the robbers should park their cars/vans.
In the Supreme Court case of United States v. Jones, FBI agents had a suspicion that Antoine Jones was involved in drug trafficking activities. To help federal agents with the case, they attached a GPS tracking device on his car to track his every move. The authorities were given a warrant to place the device in 10 days and only in the District of Columbia, but instead, they placed it in the 11th day in Maryland. After a month of tracking him, they linked Jones to a stash house with almost $850,000 in cash, a kilogram of crack cocaine, 97 kilograms of powder cocaine, and also items to package the narcotics. He was sentenced to life in prison for possessing cocaine with the intent to sell and distribute it.
The CI messaged Collins on a cellular phone, in presence of Carado, and arranged to purchase a "b" also known as a bundle, which consists of ten (10) glassine bags that contain heroin for $50.00. Carado copied and provided me with $50.00 in confidential funds, which was then handed to Shpakovsky by me. Collins messaged the CI telling her to hurry, that her supplier will soon be there with the heroin.
Phar-Mor was known as one of the major discount chain retailers in the late 1980’s - early 1990’s. It was founded by Mickey Monus, a gambler in nature, who with the help of senior management was “cooking the books” for years to cover up his loses. The reason why senior management agreed to do this fraud is the belief in unique ability of their leader to fix everything later on. This case is known as one of the biggest accounting frauds in the corporate history of the U.S. This paper will analyze who was affected by this fraud, the motives behind it and what systems of control failed to prevent it.
“Money Laundering is concealing the source of illegally gotten money, or the activity of keeping something secret.” According to Wise geek there are several different types of methods money laundering that criminals can use. Some of these include shell companies, smurfing, overseas banking, underground/alternative banking, and investing in ligament businesses. Criminals that are trying to launder money also have other methods that they use one of these is called smurfing this strategy involves separating a lot of cash into smaller dividens in order to be less suspicious. In the United States, the transaction must be beneath $10,000 – this is the dollar amount that would need to report to the administration. The cash is then kept into one or more ledgers either by numerous individuals (smurfs) or by a solitary individual over an expanded period of time. Another form is overseas banking, money launderers regularly send cash through different overseas accounts in nations that have bank mystery laws, these nations permit unnamed managing an account. They may have several bank exchanges to and from overseas accounts. Some of these countries include the Bahamas, Bahrain, the Ca...
Here, Mr. Harris called Ms. Wallace with his ransom demand. Mr. Harris then set a time and place for the pick-up of the ransom. He then traveled to the ransom delivery site where he waited for Ms. Wallace to arrive. The fact that he never received the money is immaterial. Id. at 784. The court will likely find that took a direct and ineffectual act towards committing extortion.
Lyke, B and Jickling, M. (2002). WorldCom: The Accounting Scandal. CRS Report for Congress, p2.
Auditing has been the backbone of the complicated business world and has always changed with the times. As the business world grew strong, auditors’ roles grew more important. The auditors’ job became more difficult as the accounting principles changed. It also became easier with the use of internal controls, which introduced the need for testing, not a complete audit. Scandals and stock market crashes made auditors aware of deficiencies in auditing, and the auditing community was always quick to fix those deficiencies. Computers played an important role of changing the way audits were performed and also brought along some difficulties.