Atlanta Home Loan

ATLANTA HOME LOAN

CASE ANALYSIS

INTRODUCTION

This report shows the importance of successfully implementing management control systems through the illustration of the downfall of Al Fiorini’s company, Atlanta Home Loans (AHL). Al decided to put his company in the hands of others while pursuing higher education. Al managed to establish some controls remotely, but they were unsuccessful. Being away from the office limited his control of the company and before he knew it, his control was wrested away resulting in the loss of his company. This case analysis will define the issues of AHL, discuss solutions to the problems in the case, and recommend the implementation of better controls that will benefit the company.

CASE OVERVIEW

AHL is a mortgage lending and financing company founded by Al Fiorini and based in Atlanta, Georgia. After many years of running the company, Al decided to go back to school to earn a Masters in Business Administration. Because of the company’s growth in profit and great potential, Al sought to find someone to run the business while he went to school. Al turned to Joe Anastasia who he thought was very good at what he did and had a great background. However, after inexcusable absences, Al decided that he could no longer trust Joe. Al searched and found a new partner, Wilbur Washington. Wilbur also had a background in the mortgage business, and Al was quick to judge that Wilbur would be good in sales. Al kept in touch with Wilbur and the other employees while away. Wilbur hired a new office processor which did not settle well with Al. Wilbur reacted angrily to a letter that Al sent him discussing this matter. Little did Al know there were bigger problems to come. Wilbur wrote pre-signed checks without Al's permission (something Al had specifically requested not to be done). Once Al found out about the bounced checks, he spoke with a bank to transfer funds into a payroll account that Wilbur did not have access. However, Wilbur still managed...