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Red Flags in the company

There are several red flags in the company’s operations. Phil Ackers, the president brought Julie Roper to be his personal assistant when his previous assistant left the company. Hope has allowed Julie Roper to assist her in the concession booth operations yet Julie is the one who orders the concessions. Julie also assists in the sales of tickets when it comes to group tickets sales. She calls the staff at the ticket booth and tells them to set the tickets apart. She also assists Michelle in receiving accounts receivable. Julie is too eager to help especially in sensitive company operations.

Tucker Johnson, the general manager, does not like paperwork so he has let the equipment manager, Sam, order, receive, and keep the company equipment. There is no segregation of duties in this department. Ben Hill is a high-risk employee. He may be living well beyond his means. He may be facing a lot of financial pressure to sustain his lifestyle. He has several ex-wives who he may be supporting in alimony and child support. He lacks integrity and faithfulness. He had started dating most of his ex-wives when he was still dating the previous wife. When he got a new bonus he blew it all on a car which he uses to attract women. Phil Ackers, the president has also let him run the day-to-day operations the way he sees fit due to his great performance.

These are the people who have the opportunity, the time, and the motive to commit fraud in the organization.

Internal Controls in the Company Operations

There are several weaknesses in the controls of the company. The internal controls over equipment management are weak and can be easily exploited by Sam, the equipment manager. He is able to order equipment that the company does not need for his own personal use. He is the one who gives the order, receives the equipment, and gives the receiving report to Michelle to follow up for payment.

There are also weaknesses in the internal controls that the company has over the concessions. Julie Roper has the opportunity to commit fraud in this department. When she arrived in the company, it was noted that she wanted to assist and even take over some of the operations that the former president’s assistant did not handle. Her motives may not be genuine. She may be out not to assist but to create an opportunity to commit fraud.

Hope lets her handle the supplies. Julie can steal some of the supplies for her personal use either at home or sell to people and pocket the money. The concerns that Hope has on the supplies being lower than usual could be genuine. They have never run out of stock though because Julie is the one who is charged with the responsibility of ordering concessions. She can easily make sure she orders enough so that she is not discovered. In the area of group ticket sales, there is also an opportunity to be fraudulent. Julie can receive the cash for the orders yet there were no orders for the tickets. There is no follow-up of the will-call tickets that are not collected at the end of the day. When Myrna is asked about the unpicked tickets, she simply shrugs it off by saying people are less responsible these days.

The person in the organization who can commit frauds with the highest cash implications is Ben Hill. There should be segregation of duties in the responsibilities that he has. First of all, he can alter records and steal money when it comes to the ticketing process. He counts the cash and records the sales. He is involved in the clerical and supervisory processes in the organization which is dangerous. One should not supervise what he or she has recorded. He should not participate in counting the money and recording the ticket sales as he is the supervisor.

The ticket register or log is reconciled to the cash and given to him for safekeeping. He can easily alter the records and give Michelle less money for bookkeeping. Ben should keep the ticket log and someone else to keep the money. The records should then be reconciled in the morning for bookkeeping by Michelle. It is the same risk that arises in the concessions department. Ben takes the register tape and the cash after Holly and one of the workers have reconciled the cash to the records. He takes the cash to the safe and the register to Michelle’s desk. He can easily tamper with the concessions records to keep some of the money for himself. An independent person should take the register to Michelle.

In the area of payroll, Ben Hill also has an opportunity to commit personnel fraud. He may be able to add ghost workers and the time they have worked to the records sent to ADP Company for payment. The payment goes directly from ADP to the workers through their bank accounts and checks. The risk of fraud depends on whether the summary receipt sent to TBC is verified. The company should look into having a separate payroll bank account where ADP deposits the processed salaries. The payments to the staff should be handled by a company official who confirms that there are no ghost workers in the payroll by comparing payroll names to the human resource employment records.

Ways of Committing Fraud

If I was an employee of the company I would aim to exploit to exploit the weaknesses in the payroll, concessions, and ticketing processes. If I was Sam who has the power to requisition equipment and receive it, I would ensure I get fixed assets for my houses such as furniture and fittings. If I was Ben who keeps both the ticket and the concession records and the money, I would tamper with the records and ensure I get to keep some of the money for my expenses. If I was Candace or Ben, I would add ghost workers and open the bank accounts so that I can receive money from ADP Company for fictitious employees. If I was in Julie’s position I would also steal from the concession stores for my personal use and place orders to fill the store so that I am not discovered.

Information Requests from Third Parties and other Sources

There are different kinds of information that I would be interested in obtaining from third parties in order to assist in the investigation. There is a possibility that Phil could be giving fake receipts for invoicing when he goes for promotional events. I would get invoices from the Seminole Catering company and any other company that provides services to TBC staff during these events. I would want to compare the invoices with the receipts from Phil.

I would also get the detailed payroll payment information from the ADP Company and compare it with Candace’s records and the human resource employee records to ensure that the records match. I would also be interested in the bank records of the salaried employees.

I would also get the inventory records for the concession booth, the orders placed and the receipt records to ensure that the inventory flow of every product is accounted for and nothing is missing. It is also prudent to get the ticket inventory from the staff in charge, the ticket log, and the purchase inventory flow to ensure everything is running appropriately and there is no misuse of the company’s assets.

I would also contact all the service providers that provide fixed and variable services to the company to confirm that Michelle is recording the correct amount in the journals. The organizational chart shows that no one is confirming and verifying Michelle’s bookkeeping records.

I would also request the equipment records from Sam and the supporting documentation from the vendors. Sam may have to explain why certain items were ordered. With all the information mentioned I should be able to uncover any fraud or irregularities.

Final Case Report


This is the fraudulent change of material in writing to alter the legal rights and liabilities of another person. In addition, it involves wrongful use of trademarks, falsification of documents, and counterfeited transactions. These activities involve fraud and are usually done intentionally thereby contributing to white-collar crimes. Forgery crimes have dominated the world of business and usually pass unnoticed. Forgery involves no violence and therefore contributes significantly to white-collar crimes. This crime can be committed by many people in the company. However, the following are likely to commit this crime

Phil Ackers the president who has is heavily indebted with loans on his cars, school fees arrears and appears unable to manage his finances. The other person likely to engage in this crime is Ben who virtue in his office can access records, tickets, and money. If proper controls are put in place he will tamper with records. He can create ghost workers, make counter fake tickets, falsify tickets, and alter records. He has poor personal financial management as he was nearly declared bankrupt four years ago.

He can engage in fraudulent activities of manipulating financial figures to his advantage. However, it can be tracked down through an effective auditing process. The auditing process conducts a close follow-up of all transactions in order to ascertain their validity. During this process, irregular transactions can be netted.

Sam who is involved in purchasing is another for committing forgery as he has records, which he can manipulate. Michelle Shelton who is the accounts clerk can also use her position to commit the crime.

As aforementioned, forgery crimes are mostly perpetrated against a business institution by persons in a position of influence. These individuals usually have access to sensitive financial or business information, which they manipulate to accrue monetary gain. This may for instance involve corporate officers in an organization exploiting their knowledge on financial trends of a company to manipulate records.

Forgery is mostly perpetrated using tools such as computers and paperwork. In this case, perpetrators may exploit the new computer technologies to perform illegal transactions for financial gains. It involves the use of computers that tend to be complex and sophisticated making them difficult to detect. Similarly, paperwork may be used to execute forgery and tax evasion through the presentation of forged documents and falsified financial reports.

Intent: The fact is that that some of the employees were involved in fraudulent activities in the past is enough reason to believe that they will intend to do it again. In light of their previous behavior, there is a significant risk of fraud prevalent within this assignment as the officers of the company have a history of misuse of funds. As it is prevalent in practicing corporate fraud, some may well be a shell company, allowing the employees to take advantage of the lack of proper internal controls to perpetrate crime.

Economic impact- Escalation of forgery especially those affecting the records or finances may result in the loss of money and trust in the employees of the company. This may be caused by feelings of betrayal among the investors by the corporate officers whom they have entrusted with their investments. Such investors may be compelled to withdraw their investments from the company which may adversely implicate the affected company (Farlex, 2011).

Additionally, loss of investor confidence in the corporate leadership of the business institutions may affect business in many ways.

Embezzlement and Theft

This white-collar crime occurs when a person who is entrusted with the properties of another fraudulently appropriates it. This is usually the crime committed by an employee who steals money from the organization they work for. This crime can easily occur in any business firm but banks are usually the most prone institutions. In most business organizations, accountants perform this fraud and then fix figures in the books of accounts as a cover. This constitutes white-collar crime since no force is usually used. In this company, Michelle would embezzle money meant from payroll, concessions, and ticketing processes. If I were Sam who has the power to requisition equipment and receive it, I would ensure I get fixed assets for my houses such as furniture and fittings. If I were Ben who keeps both the ticket and the concession records and the money, I would tamper with the records and ensure I get to keep some of the money for my own personal expenses. People strive to achieve high standards of living so as to upgrade their social class in society. This is usually capital intensive and therefore individuals could result in white-collar crimes to achieve the desired social class. These crimes are said to be of high status since individuals that commit them are usually high-class people. On the other hand, people from any social class can commit white-collar crimes with respect to positions of trust they hold in the organizations they work. For example, people working in bank tellers do not earn incomes that place them in high social classes but the positions they hold can contribute significantly to acts of fraud. This means that social class and positions held by individuals in organizations determine the levels of fraud with respect to white-collar crimes. If I was Candace or Ben, I would add ghost workers and open the bank accounts so that I can receive money from ADP Company for fictitious employees. Here they may go against the company and a change in payroll and end up with cooked figures that do not reflect the true company position. The auditor, therefore, has to carry out tests on a reasonable sample that is representative to ascertain the materiality of the included or excluded items. This in turn prohibits the management from managing earnings to the extreme which may affect the opinion of the auditor. Auditing acts as a monitoring device that minimizes motivation by management to manipulate reported profits

There will be a financial loss caused to this crime. White-collar crimes such as corruption, fraud, and tax evasion involve huge sums of money whose loss may have grave implications on the economy of the country. White-collar crimes involving corporate officers working in the company may result in embezzlement and misappropriation of financial resources set aside for development projects thereby implicating negatively on the performance of the company.

Similarly, white-collar offenses such as fraud as well as the presentation of falsified financial data may have a significant impact on the profits of the company. The misstatements in the financial statements arose from either embezzlement through collusion, financial fraud, or intentional asset misappropriations. Upon inquiry from the relevant authority, the management refused to cooperate. Instead, they branded me as incompetent and unable to handle and undertake any professional work and they requested my company to remove me from the position. I had to explain myself and convince the management of the client of the misstatements and the impact they had on the financial accounts.

Intent – The company can fail when the financial officers overpowered its system and business plans like in this case where there is a failure to take some issues seriously. However, money is the root of all evil—simple because money manipulated and controlled the whole company and its officers. The manipulation of all financial statements and fraud accounts to avoid taxes, tickets, and concessions will affect the business. It proved that the manipulators and controllers of the company will exploit its vulnerability and power in the business scene. The conspirators will debunk all ethical principles that each business should obtain to accomplish its role, duty, and obligation toward its partners, employees, and customers.

Some of these are personal ethics, fairness, integrity, truth-telling, profit, values-based, and leadership. However, it seemed that some employees of the company are overlooking these business ethics. It means that they broke ethical laws that should stand as their basis for accomplishment and success. They should do business is like doing one’s life. In business, leaders should play fair wherever they go to prove that they create an industry for their clients’ needs—not “only” for their gain. In connection to this, they forgot to realize that its great business must be fair throughout its events and accounts—to prove its integrity and credibility. Nevertheless, they are breaking these principles because they did not prove their worth by exploiting their power and profit for the leaders’ stability and authority. It showed that the company failed its leadership ethics because the leaders were not able to value their business and personal morality.

In business ethics, the company had to provide sufficient, accurate, and real statements of accounts and other financial data to ensure that the company was doing its job—which the company is not able to present. It demonstrated the fact that company and corporate ethics were eliminated and not utilized by its officials. They had to provide company and corporate ethics to its staff and team players throughout its branches, locations, and businesses to prove that it is credible enough to perform its industry in various nations. Nonetheless, the officials themselves confirmed that ethics were not important in their company because as long as they continue to obtain personal profit, it is always more important than moral values. Therefore, some employees are breaking the laws of integrity, honesty, organization, and moral behavior of business ethics that ruin the whole points and parts of the company—from its simplest and smallest department to its highest officials and largest division.

Documentary evidence collected directly from outside sources is reliable to the extent that the examiner need not require further proof to validate the matter. Documentary evidence indirectly from outsiders is also reliable given that the examiner can verify the outside source of the document. Documents internally generated but validated externally are sufficient proof is the auditor is satisfied with the integrity of the outside verification. Documents generated entirely internally are sufficient proof only if the auditor can obtain material proof to that effect.

Recommendation and Conclusion

Currently, the system of the company works but can be used by staff for personal benefits by infiltrating white-collar crime. Given this idea, it is evident how the company is focused upon providing products and services with a lesser concern on the internal controls that will reduce misapplication of company resources. It is easier for the company officers to get involved in white-collar crimes in this company. This will involve nonviolent offenses perpetration against this company which tends to be diverse and may include offenses such as embezzlement, ticketing fraud, corruption, falsification of financial reports, forgery, and antitrust violations among others. These crimes are mostly perpetrated by individuals in positions of influence in the company which gives them access to information and resources whose misappropriation constitutes white-collar offenses. This results in heavy financial losses, loss of investor trust and confidence besides implicating profitability.

Training employees should always be the first step in preventing losses. However, most employers neglect this step on the assumption that it is an expensive and unnecessary venture. Based on different studies, more than three-quarters of the top employers utilize employee training as a key facet in shrinkage prevention. Enforcing enterprise management programs creates general awareness on loss prevention along the human resource hierarchy. Training all members of the human resource on loss mitigation strategies ensures a valid means of preventing both internally and externally caused shrinkages.

Employees should be oriented to transactional-based loss prevention strategies. These two facets should be incorporated in the training modules and the company should ensure that the programs are relevant to the industry. Scholars posit that these training programs should focus on the proper use of loss prevention equipment. In addition, these training programs should create awareness of the incidences of theft and the most appropriate means of managing such incidences. Scholars also recommend the use of internal shrinkage incidences as guides in the formulation of defensive techniques.

It should be noted that forensic accountants play an important part in examining deception or any other illegal activity going on within the accounting system. They use statistics, investigative methods, and other pieces of evidence to find out the factors involved in a situation. They present all facts, proven research, and other findings in a form of a formal report, which is then submitted in court for further procedure of investigation. A forensic accountant should be responsible and expert in preparing financial evidence, collecting data, and assisting legal procedures. Also, to perform duty properly a forensic accountant should have clear legal concepts while dealing with crucial cases. Thus they should be hired.

The crimes that can be committed in this case constitute a global phenomenon and have been around for many years. Fraudulent behaviors in corporations such as the infamous Teapot Dome Scandal were also evident in the twentieth century during the reign of President Warren Harding. Despite the grave financial implications of the white-collar crimes on the affected business corporations and government agencies, the crimes attracted less attention from the authorities with the perpetrators going unpunished. the gravity of the ramifications that white-collar crimes have on the economy also increased attention from the media thus leading to wide and in-depth coverage on white-collar crime incidences involving high-ranking business executives and corporation heads. The white-collar crimes perpetrated were closely tied to the professions of the involved individuals who usually occupied higher social and economic status.

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