Follow the Money
Keywords:Case Study, accounting systems, safeguarding assets, separation of duties, employee theft
Although the names have been changed, this case is based on actual events that occurred at a small college between 1987 and 2003. The college operates a child development center under the auspices of its Child Development Department. A faculty member whose child is at the center discovers that her checks are not being cashed on a timely basis and complains. The college accountant discovers that funds are being misdirected and deposited in an unauthorized bank account. She also discovers that the program revenues are $12,000 short out of a budget of just over $50,000. It is further uncovered that a long term employee of the college opened an unauthorized bank account over 15 years ago and has embezzled almost $200,000 over that period. This employee kept records of all transactions and the methods and extent of the fraud are explained in the case. The issues of internal control and adequacy of policies and procedures are presented. Students are asked to present their analysis of the current accounting procedures, along with recommendations for improving the procedures to prevent future fraud. Students are also asked to address the responsibilities of the colleges auditors. This case is suitable for undergraduate classes where the topics of internal control and accounting systems are presented. Safeguarding of assets, separation of duties and employee theft are possible topics for discussion. Students will analyze the current flow of accounting information and address inadequacies in the current system.
Copyright (c) 2005 Author retains copyright
This work is licensed under a Creative Commons Attribution-NoDerivatives 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).