what we can learn about this case ?

egg Study Textbook Solutions Expert Q&A Study Pack Practice Chapter 7 Problem 50CQ Bookmark Show all steps: ON Problem Joe Frecaso was recently hired as the controller for Larson Cement Company after the previous controller was killed in a boating accident in Biscayne Bay. That controller had been with the company since it first opened its doors. Joe spends most of his time in the back office that has a panoramic view of the yard" where the company trucks constantly come and go throughout the day. Larson is a privately held company owned by the same family for 40 years. The company delivers concrete to construction sites throughout Miami/Dade County area. Frank Larson, the son of the original CEO, runs the company. Joe and his two staff accountants; Betty Ladrone, the treasurer; and her three staff members support the company's operations. There is also a secretary, front-office staff of three, an operations supervisor, and a sales staff of seven. Larson Company normally sells to most contractors on credit. Betty supervises the credit approvals and reviews and handles bill payments, collections, and the bank accounts, Joe has responsibility for the bank reconciliations, accounts receivables, and the accounting records in general including the financial reports. This morning the company secretary thumbed through the incoming mailas was her custom There was a stack of about 30 envelopes, many of them obviously containing checks from customers paying on their accounts. She mentally prepared herself to separate the envelopes into several different piles. She would route each pile to the appropriate person: Frank, Joe, Betty, and Sara Martillo, the head of sales. One envelope caught her eye. It was from the bank. but it wasn't thick enough to be a bank statement. In fact, after feeling the letter, she concluded that it contained only a single page inside, part of which she tried to see through the small clear window on the front of the envelope that revealed the company's name and address She looked almost sideways through the envelope's window to get a better look. There was a message in red letters, but because of the angle, she couldn't read what it said. That was enough, however for her to make a decision: The letter should go straight to Frank He had egg Study Textbook Solutions Expert Q&A Study Pack Practice | Chapter 7. Problem 50CQ Bookmark Show all steps: ON She looked almost sideways through the envelope's window to get a better look. There was a message in red letters, but because of the angle, she couldn't read what it said. That was enough, however, for her to make a decision: The letter should go straight to Frank. He had given her strict instructions to route any unusual-looking mail directly to him. About the time that the unusual looking enveloped arrived on Frank's desk, Joe was pouring over head, sighed, took a sip of his coffee, and remembered that the current month's bank statement had just arrived and was sitting unopened, propped up against his computer monitor. Then the phone rang. It was Frank calling. "I want to know what's going on," said Frank in an almost accusatory voice. "Our operations bank account is overdrawn by some $14,000! Frank was pretty sharp when it came to financial matters. His education included an MBA degree with an accounting concentration, and he had worked as the controller of Larson Cement when he was younger. Within seconds after Joe hung up the phone, Frank appeared in his doorway looking angry. 1 want the bank statements right now." Joe tried to maintain his professional demeanor, but his chest tightened. "Don't look at me," he said. "I don't write the checks." Frank returned to his office, opened the current month's combined bank statement, and began thumbing through canceled checks. He stopped at one check for $2.500 paid to a Mary Waters. "Mary Waters, who are you?" he mumbled to himself. Frank was a hands-on CEO and knew all of the company's vendors, and he had never heard of Mary Waters before. He looked at the endorsement on the back of the check. The checked had been deposited into a New York bank account. Nervously, Frank spread the checks out on the table. Right away. Several other checks paid to De ENVIO APIE Chapter 7, Problem 50CQ Bookmark Show all steps: ON Joe tried to maintain his professional demeanor, but his chest tightened. "Don't look at me," he said. "I don't write the checks." Frank returned to his office, opened the current month's combined bank statement, and began thumbing through canceled checks. He stopped at one check for $2,500 paid to a Mary Waters "Mary Waters, who are you?" he mumbled to himself. Frank was a hands-on CEO and knew all of the company's vendors, and he had never heard of Mary Waters before. He looked at the endorsement on the back of the check. The checked had been deposited into a New York bank account. Nervously, Frank spread the checks out on the table. Right away, several other checks paid to Mary Waters popped out and stared at him. Now was is sure that something was wrong: No vendor is paid more than once a month. So, he grabbed the phone and called Joe again. Joe answered on the first ring. In a thundering voice, Frank said, "Joe, we've got a problem." Joe remained quiet and waited for what seemed like a long time and became more nervous because it appeared that he was supposed to know what the problem was. "That's not a good sign," he thought. Frank pounded Joe with questions about Mary Waters. "We'll call Betty," Joe finally said. "She's the one with the checkbook." "No," said Frank. "I want you to do a complete audit of her office, and I want a hidden video camera set up in a position to record everything she does at her desk. "But what if someone else in her office stole the checks?" "That's not possible," replied Frank. "She keeps the checkbooks locked up at all times in her safe, and she's the only one besides me with the combination. "Ok, I'll start the investigation." egg Study Textbook Solutions Expert Q&A Study Pack Practice Chapter 7 Problem 50CQ Bookmark Show all steps: ON Problem Joe Frecaso was recently hired as the controller for Larson Cement Company after the previous controller was killed in a boating accident in Biscayne Bay. That controller had been with the company since it first opened its doors. Joe spends most of his time in the back office that has a panoramic view of the yard" where the company trucks constantly come and go throughout the day. Larson is a privately held company owned by the same family for 40 years. The company delivers concrete to construction sites throughout Miami/Dade County area. Frank Larson, the son of the original CEO, runs the company. Joe and his two staff accountants; Betty Ladrone, the treasurer; and her three staff members support the company's operations. There is also a secretary, front-office staff of three, an operations supervisor, and a sales staff of seven. Larson Company normally sells to most contractors on credit. Betty supervises the credit approvals and reviews and handles bill payments, collections, and the bank accounts, Joe has responsibility for the bank reconciliations, accounts receivables, and the accounting records in general including the financial reports. This morning the company secretary thumbed through the incoming mailas was her custom There was a stack of about 30 envelopes, many of them obviously containing checks from customers paying on their accounts. She mentally prepared herself to separate the envelopes into several different piles. She would route each pile to the appropriate person: Frank, Joe, Betty, and Sara Martillo, the head of sales. One envelope caught her eye. It was from the bank. but it wasn't thick enough to be a bank statement. In fact, after feeling the letter, she concluded that it contained only a single page inside, part of which she tried to see through the small clear window on the front of the envelope that revealed the company's name and address She looked almost sideways through the envelope's window to get a better look. There was a message in red letters, but because of the angle, she couldn't read what it said. That was enough, however for her to make a decision: The letter should go straight to Frank He had egg Study Textbook Solutions Expert Q&A Study Pack Practice | Chapter 7. Problem 50CQ Bookmark Show all steps: ON She looked almost sideways through the envelope's window to get a better look. There was a message in red letters, but because of the angle, she couldn't read what it said. That was enough, however, for her to make a decision: The letter should go straight to Frank. He had given her strict instructions to route any unusual-looking mail directly to him. About the time that the unusual looking enveloped arrived on Frank's desk, Joe was pouring over head, sighed, took a sip of his coffee, and remembered that the current month's bank statement had just arrived and was sitting unopened, propped up against his computer monitor. Then the phone rang. It was Frank calling. "I want to know what's going on," said Frank in an almost accusatory voice. "Our operations bank account is overdrawn by some $14,000! Frank was pretty sharp when it came to financial matters. His education included an MBA degree with an accounting concentration, and he had worked as the controller of Larson Cement when he was younger. Within seconds after Joe hung up the phone, Frank appeared in his doorway looking angry. 1 want the bank statements right now." Joe tried to maintain his professional demeanor, but his chest tightened. "Don't look at me," he said. "I don't write the checks." Frank returned to his office, opened the current month's combined bank statement, and began thumbing through canceled checks. He stopped at one check for $2.500 paid to a Mary Waters. "Mary Waters, who are you?" he mumbled to himself. Frank was a hands-on CEO and knew all of the company's vendors, and he had never heard of Mary Waters before. He looked at the endorsement on the back of the check. The checked had been deposited into a New York bank account. Nervously, Frank spread the checks out on the table. Right away. Several other checks paid to De ENVIO APIE Chapter 7, Problem 50CQ Bookmark Show all steps: ON Joe tried to maintain his professional demeanor, but his chest tightened. "Don't look at me," he said. "I don't write the checks." Frank returned to his office, opened the current month's combined bank statement, and began thumbing through canceled checks. He stopped at one check for $2,500 paid to a Mary Waters "Mary Waters, who are you?" he mumbled to himself. Frank was a hands-on CEO and knew all of the company's vendors, and he had never heard of Mary Waters before. He looked at the endorsement on the back of the check. The checked had been deposited into a New York bank account. Nervously, Frank spread the checks out on the table. Right away, several other checks paid to Mary Waters popped out and stared at him. Now was is sure that something was wrong: No vendor is paid more than once a month. So, he grabbed the phone and called Joe again. Joe answered on the first ring. In a thundering voice, Frank said, "Joe, we've got a problem." Joe remained quiet and waited for what seemed like a long time and became more nervous because it appeared that he was supposed to know what the problem was. "That's not a good sign," he thought. Frank pounded Joe with questions about Mary Waters. "We'll call Betty," Joe finally said. "She's the one with the checkbook." "No," said Frank. "I want you to do a complete audit of her office, and I want a hidden video camera set up in a position to record everything she does at her desk. "But what if someone else in her office stole the checks?" "That's not possible," replied Frank. "She keeps the checkbooks locked up at all times in her safe, and she's the only one besides me with the combination. "Ok, I'll start the investigation