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Copy of Copy of Tallahassee Bean Counters

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Anita Khaloo

on 13 May 2013

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Transcript of Copy of Copy of Tallahassee Bean Counters

Anita Khaloo
Arlett Karan
Sharmin Akter
Carol Prashad
Natasha Bell Tallahassee Bean Counters FRAUD? Maintenance
Ticket Sales Revenue Recognition Construction CONCLUSION Maintenance - Vendor Fraud Ticket Revenue Recognition Concession - Inventory Red Flags The Act Collusion Between Phil & Julie
Phil Had A Financial Incentive
Julie Recorded Enough Fake Sales
List Delivered To Ticket Booth
Phil Receives An Inflated Bonus
Paid Julie A $10,000 Kickback Maintenance Purchase Orders
Invoices from Freddy's Fix-it
Recurring Expenses & Revenues Red Flags Only Phil Ackers and Julie Roper receive invoices from Freddy's Fix-it shop. Michelle Shelton is the A/P Clerk. The Act Collusion between Phil, Julie, and Freddy
Freddy submits inflated invoices for work that was poorly done or not done at all
Phil and Julie receive the invoices
Fraudulent invoices are approved and Freddy is paid Background OVERVIEW Group Ticket Sales Presold by Julie. A/R Collections Task Segregation of Duties Collusion Potential for collusion between Julie and Phil. Phil's Bonus Large Increase In Accounts Receivable: Analytical Procedures Documents We Procured Game Attendance
A/R Subsidiary Ledger
Phil's Bonus Schedule
Julie & Phil's Bank
Statements Documents
We Had General Ledger
Tickets Sold (Register)
Financial Statements Document Evidence Based On TBC's Mortgage Interest Rate ACC 410: Group 1 Started with dollar ticket sales per general ledger
Compared it to ticket sales per attendance.
This difference equals the amount of uncollected accounts receivable in EVERY month. Investigation Strong
Evidence ! TBC would not have qualified for the 5% loan.
Phil's bonus was $26,028 too much! Over the 5 months, TBC recorded $110,448
in fake ticket sales. Damages Economic Gain Julie receives a $10,000 kickback.
Phil receives a personal gain of $16,028. Consequences Excess salary expense - bonus
Overstated contingent rental fees
State & Federal Dept. of Revenue Outline Of 4 Frauds Present Mr. Kennedy:
I think there is something funny going on at TBC. Numbers do not add up, lots of whispers in the hallways and closed-door discussions have me suspicious. If I were you I would check it out.
A long-time friend.
TBC has never been audited and Franklin Kennedy has asked us to focus on the last five months. This is the period during which the new training facility was constructed.
Employees have been told the audit is a requirement of
the bank, which provided the mortgage loan for
the recently completed training facility. Analytical Procedures Numerous large repairs on the new training facility Related Parties Freddy Harris, owner of Freddy's Fix-it, is Phil Ackers brother-in-law Contracted Handyman TBC uses AIA Handyman for monthly routine maintenance but never for large repairs, even though TBC company records state that large repairs will be negotiated with AIA Handyman A/P Task Collusion Potential for collusion between Phil, Julie, and Freddy Documents
We Had Documents
We Procured Document
Evidence Independent Appraisal of Freddy's Work
Bank Statements for Phil and his wife Mary, Julie, and Freddy Difference between what was paid, the normal cost of the work that was done, and the value of the work that was done
The difference equals the amount of inflated maintenance work Investigation Damages Economic Gain Consequences Over the 5 months, TBC has overpaid $46,160 in inflated maintenance expenses to Freddy's Fix-it Freddy receives $46,160 in unearned revenue
Phil does not have to support Freddy anymore, saving $1,000 a month for a total for $5,000
Was not able to prove if Phil was receiving a kickback Excess maintenance expense
State & Federal Dept. of Revenue
Full transcript