Question
Gear Town Motorcycle Shops, Inc. has been your audit client for four years. It operates three shops in the region. You have heard that the
Gear Town Motorcycle Shops, Inc. has been your audit client for four years. It operates three shops in the region. You have heard that the controller, Frank Flash Emeralda, loves to go to the casinos and play the slot machines. He only has bad luck, however, and always loses. Usually the treasury clerk, Darcella Winger, picks up the cash receipts from the stores and deposits these in the bank. Once in a while, when Darcella is sick, Flash picks up the cash receipts. Strangely enough, you have discovered evidence that this cash disappears somewhere between the stores and the bank. You have overhead Flash saying things like, Im underpaid and underappreciated, and No one knows how hard I work.
- What type of fraud, misappropriation of assets or fraudulent financial reporting, is mainly present here?
- What is the motivation of Flash?
- What is his opportunity?
- What is his rationalization?
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