Contemporary Auditing

Aksum University

College of Business and Economics

The Department of Accounting and Auditing

Master’s program

An Assignment on the course title Contemporary Auditing

Case 3.3

“United Way of America”

Submitted to Redae Kahsay

Ph.D. candida

1. Daniel Abera Akusc 55/15

2. Hintsa Ayenew 59/15

19.12.2015

Questions No 1

1. Identify and briefly describe fundamental and cost-effective internal controls that charitable organizations could implement to reduce their exposure to theft losses.

* In 1887 several of Denver’s community and religious leaders established the charity organization which is called united way of American after several name changes its current name has been adopted in 1963.

* United way grew rapidly and becoming the nation largest charitable organization and each year approximately 40,000 charities across the United States received cash distribution from united way. in 2006,united way raised four billion dollars more than double the charitable donation received that year salvation army ,the nation’s second largest charitable organization.

* Even if the growth is very rapid and remarkable united way faced tow major challenges which is the first one is the intense and growing competition due to increase in number of charitable organizations and the second major challenge is a loss of credibility and embezzlement has been occurring frequently by its various employees and management members.

* The federal jury found (Aramony who was the president of United for more than two decades) guilty of more than two dozen of the individual fraud charges and Sentenced to serve seven years in federal prison. In the investigation of his case testimonies described that he had squandered united way funds on lavish trips to Las Vegas, Europe,...