Case 1 #7: No, you would not be able to quantify the financial gains to the internal perpetrator by
analyzing the victim organizational data. Bernie Madon issues bonuses on a discretionary basis to only
his salaried employees in the beginning of the month of December. When looking at a payroll journal,
the increases for salaried employees during the month of December can be a result of their annual
bonus. On the other hand, it could also be a result of overtime or a promotion. Additionally, since Bernie
writes down specific bonus amounts for each employee on a piece of paper that is then discarded by
Sherika Spies there is no way to confirm the actual amount that is supposed to be allocated as a bonus
to each employee, which makes quantifying the amount the internal perpetrator is stealing impossible.
To make matters worse, Bernie has been known to issue an additional bonus on top of the annual bonus
if the company is doing well. Similar to the annual bonus, this bonus is discretionary and supporting
documents are not kept on file. The final flaw in the system that does not allow for determination of the
amount stolen is that Sherika allocates her payroll along with her husband’s and there are no internal
controls that monitor, prevent, or review her actions.
Case 2 #5: Yes, you would be able to quantify the financial gains to the internal perpetrator by analyzing
the victim organizational data. Invoices are received from clients stating the amount that Madon Oilfield
Services Inc. is required to pay. The invoices are input when received, paid by checks issued by Sherika
with Bernie’s signature or a stamp of his signature, and the bank accounts are reconciled by Mary
Gonzalez who consults with Sherika regarding any odd transactions. This process of inputting the
invoices guarantees a record of the amount paid to each vendor and may potentially contain a memo
stating what the transactions are for. The tracing of the checks disbursed to the invoices in the system
would be a way of verifying that cash was paid for balances that were due. Bernie and the branch
managers have company credit cards that require the retention of documents to support the
transactions. Additionally, Sherika pays Bernie’s personal Chase and American Express credit cards out
of the business. Credit cards allow you to look at monthly statements which would allow for the
quantification of the amount spent on company credit cards and the amount spent on the personal
credit cards.
Case 3 #5: No, you would not be able to quantify the financial gains to the internal perpetrator by
analyzing the victim organizational data. Due to the fact that items are priced at different rates
depending on how critical they are to the customers’ projects, there is not set amount charged for a
specific product. Additionally, outside purchases include an additional premium that is charged to
Madon for delivery of the product. These two factors make is impossible to determine whether the
amount that is invoiced by the company selling the product is the amount that should be charged in
those circumstances. Furthermore, customers are charged an 18% markup on the purchase price which
continues to make quantifying the amount that is stolen impracticable.