Fraud Examination Case

ISSUES IN ACCOUNTING EDUCATION

Vol. 29, No. 2

2014

pp. 331–336

American Accounting Association

DOI: 10.2308/iace-50554

Fraud Examination Case: Crafty Cash Theft?

Jodi L. Gissel

ABSTRACT: This case engages students in an interactive in-class learning activity.

Students are given a brief case scenario and the task of investigating fraud in a small

company. Pre-class preparations require students to identify likely fraud schemes and

how to proceed with the fraud investigation. The in-class portion summarizes students’

individual assessments and then emphasizes examination of evidence to resolve the

case. The case challenges students to consider how to approach a fraud investigation

and what procedures or analyses would provide relevant evidence. The activity also

requires students to consider internal control weaknesses and suggestions for improving

internal control in a small organization. The intended audience is a graduate-level fraud

examination course or auditing course with a fraud examination component.

Keywords: fraud examination; asset misappropriation; internal controls.

Data Availability: Handouts and solutions are provided in the Teaching Notes.

INTRODUCTION

C

indy Nyglens owns a small craft shop in downtown Sun Prairie. Last week, Cindy received

an anonymous typed note in an unstamped envelope, left on her desk. The note read:

None of her employees knew where the envelope came from when she questioned them about

its appearance. Cindy is obviously concerned, but unsure how to go about investigating the tip

herself. She contacted you for assistance.

You arrange to observe store operations, under the premise of providing feedback as a

consultant for improving and streamlining business operations. Cindy has been trying to grow her

Jodi L. Gissel is an Assistant Professor at Marquette University.

I thank Don Giacomino for observing a case implementation and for providing comments on the initial version of the

case. I...