Methods that Smith and Jones Could Have Used to Steal $34 million in Cash over 12 Years under KOSS's Internal Control System

Another cash theft plan that may have been carried out is to cancel or repeat the transaction. By stealing funds, Sachdeva and Mulvaney may have re-entered the book in the first deal and may have reversed the input - basically hide their theft. Sachdeva and Mulvaney may steal accounts receivable by skimming or enforcing balance transactions. Sachdeva and Mulvaney can also be purchased individually through the wrong invoice. They can bypass internal control and ask Michael Koss to approve payment.

Management can also approve cash payments based solely on invoices. Finally, the computerized accounting system of the shipping department can be accessed and operated by the controller, which constitutes a good internal control device. In summary, management has too much authority to enter and change the company's electronic accounting system without double checking to verify and control manual changes in the system. Board Directors Directors can promote their effectiveness by establishing a strong link between the Board of Directors and day-to-day operations. However, from the perspective of personal profit, internal directors may include the independence of the Board of Directors. For example, the ability of the Board to set bonuses related to performance and compensation of management is an important issue for internal directors. Another general topic of this research is to increase the internal staff of the board to reduce the monitoring of the board.

The company's internal control system problem started with the board of directors. At the top of the internal control system, the board of directors is ultimately responsible for the business of the company. Most importantly, it sets the rules of the game for CEO (CEO). The role of the board of directors is to hire, dismiss, pay compensation, and serve as a high-level lawyer. In the absence of an external crisis, few boards have achieved success in the past few decades. This is particularly disappointing for the purposes of internal control.