ACC30003: Forensic Accounting Case Study and Analysis

This document presents a comprehensive forensic accounting case study analysis centered around a scenario of employee embezzlement at the Family Welfare Practice Centre. The analysis begins with an examination of the case facts, identifying key issues such as flawed recruitment policies, inadequate lunch time policies, lack of segregation of duties, poor security for the cash box, unclear cash collection procedures, and insufficient documentation. The study then provides a detailed nine-square plan addressing these issues, proposing improvements in recruitment, lunch time policy, segregation of roles, cash box security, cash handling procedures, and documentation. Following the plan, the document outlines an 'Engage and Explain' section, elaborating on the proposed changes and their impact. The assignment also includes an 'Account, Clarification, and Challenge' section, followed by a 'Closure' and 'Evaluation' component, emphasizing the importance of assessing the outcomes of the suggested changes. The study highlights the critical role of internal controls, thorough documentation, and structured interviews in preventing and detecting fraud. The case study's conclusion stresses the importance of a standard recruitment policy, clearly defined roles, and robust security measures in financial management.

Running head: FORENSIC ACCOUNTING
Forensic Accounting
Name of the Student:
Name of the University:
Authors Note:

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Contents
Case study analysis:.........................................................................................................................2
Identification of major issues from the case study:.........................................................................3
Nine square plan:.............................................................................................................................5
Engage and explain:.........................................................................................................................5
Account, clarification and challenge:..............................................................................................7
Closure:............................................................................................................................................7
Evaluation:.......................................................................................................................................7
References:......................................................................................................................................8

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Case study analysis:
Family Welfare Practice Centre is a medical office that needed a front desk assistant to conduct
necessary activities in relation to the front office desk assistant post. Patti Clinton is a single
mother of a 5 year old son. Though she is merely 23 years old but she has the responsibility of
taking care of her 5 year old son. Being a single mother she has to take care of her son all by
herself and hence, needs a job to earn the financial resources necessary for the livelihood of the
two. In order to provide a decent life to her son Patti applied for the front desk assistant post in
the Family Welfare Practice Centre. Despite completely inexperience in the field of medical
practice, Patti was appointed as the front desk assistant in the medical office. This is mainly due
to the pleasant smile and demeanor shown by Patti that convince the Lucy Green, the office
manager to assess that Patti would be an excellent person to do the job as the front desk assistant
(Duffin, 2017). However, subsequent to the appointment of Patti Clinton in the post of the front
desk assistant there was significant change in the lifestyle of her which is quite surprising for the
colleagues of Patti since the salary of Patti was certainly not commensurate to afford such
lifestyle. As a result Lucy and Sandra, both employees of the Family Welfare Practice Centre
and fellow colleagues of Patti decided to keep close eyes on the movement and activities of Patti
at the workplace. However, before they find out anything on their own a patient named Mrs.
Dawson visited the Medical Centre to complaint about the recent bill she has received for an
amount of $50. The patient, Mrs. Dawson claimed she has already paid the amount in cash to
Patti and has a cash receipt to prove such payment. The discussion with Mrs. Dawson further
proved that indeed she has paid that amount and Patti has received the payment and embezzled
the fund. Further inquiry revealed that it was not only the payments of Mrs. Dawson but
payments of many other patients have also been misappropriated by Patti. She has even tried to

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destroy many documents to safeguard her interest to ensure there is no paper trail to prove her
fraud. Thus, the case study shows that there are significant weaknesses in the internal control,
security system and management of the Medical Centre. Otherwise it would not have been
possible for a rookie to come and start embezzle money from the cash box without being caught
before the complaint of a patient about such payment (Shtub, 2016).
Identification of major issues from the case study:
Evaluating the facts from the case study has helped us to identify the major issues in the
management and functioning of the Welfare Family Trust Centre. In addition to that the issues in
the internal controls and securities within the Medical Centre have also been identified
("Recruitment crisis", 2018). The main issues identified from the case study are discussed below.
Inappropriate recruitment policy:
Firstly, the recruitment policy of the Medical Centre is flawed and inappropriate. To think that
Lucy, the office manager can just appoint Patti as the front desk assistant who has zero
experience in medical practice only because the former was impressed on the latter’s smile and
demeanor is absurd. Thus, the medical Centre has an inappropriate and ineffective recruitment
policy (Dwivedula, 2019).
The wrong and risky lunch time policy:
The lunch time policy in the Dr. Steever’s office to give the entire responsibility of looking after
the office at the lunch time to the rookie while the other personnel gone went to have lunch
together is not correct strategy. This creates huge opportunity to the rookie to misappropriate or
embezzle fund or do anything that is not correct thing to do during the lunch time.

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Lack of segregation of duties:
The duties and responsibilities must segregated properly to ensure that the possibility of
collusion and fraud by the employees is extremely less. However, in case of office of Dr. Steever
it is actually opposite. The roles and responsibilities of the employees have not been segregated
properly thus, it allows employees to do more than one task within the office. This increases the
risk of fraud and non-verifiability of one’s work by another (Ilic-Pupovac & Vlaovic-Begovic,
2017).
Improper security to the cash box:
The fact that a rookie started to dip into the cash box so easily without getting caught shows that
there is lack of security to the cash box. The cash box should have necessary security to ensure
safety and security of the cash.
Unclear procedure of collecting and storing cash:
The medical Centre does not have a clear procedure to collect and store cash. Thus, it was so
easy for a rookie to misappropriate cash collected from patients. It is important for an
organization or office to have effective procedures for both collecting and storing cash collected
from patients / customers (Law, 2018).
Not all cash withdrawals are recorded:
The office does not record all cash withdrawals. Especially petty cash withdrawals are not
recorded properly. This is a huge cause of concern for any office as this has the potential of
resulting to massive crisis for the office.
Cash receive documentation is not detailed and extensive:

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The office does not have an extensive cash receive procedure and documentation to support the
cash receipt.
Nine square plan:
Recruitment policy Lunch time policy Role and responsibilities
employees
Internal controls Internal securities Specific security of the cash
box
Procedure of collection and
storing of cash
Cash withdrawals Documentation
Engage and explain:
Recruitment policy:
The office should have standard policy to follow while it comes to recruiting employees for
different positions.
The lunch time policy:
The office should not give the entire office responsibility to any one individual or employee no
matter how much experience and hard worker person he or she is. The lunch time should have a
slot of time and the employees should be allowed to take lunch to ensure there is always at least
two individuals present in the office to take care of the roles and responsibilities correctly.
Segregation of roles and responsibilities:

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The roles and responsibilities of employees and workers must be segregated properly to ensure
that no one does a whole sequence of job from starting to finish. This will reduce the chances of
fraud and misappropriation.
Security to the cash box:
The cash box should be given maximum amount of security including 24 hours surveillance of
the cash box area with CCTV cameras. This will improve the security of the cash box and office
as a whole. The chances of unauthorized entries and dipping into the cash box would be reduced.
Procedure of collecting and storing cash:
The office should have clear procedure of collecting and storing cash. Currently the unclear
procedure to collect and store cash has contributed to the embezzlement of cash. The fact that a
rookie front desk manager successfully misappropriated cash without getting caught is mainly
due to the lack of clarity in the existing cash collection and storing procedure in the office.
Cash withdrawals should be recorded:
Each and every single cash withdrawal shall be recorded properly to ensure there is not even a
single transaction which is not recorded (Cowan, 2018).
Documentation:
The office should maintain each and every single document related to cash transaction to ensure
that each and every single receipts and payment have detailed documents to support the
respective transactions.
Accounting system:

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The office should have a standard accounting system in place to improve the recording and
documenting of financial transactions.
Account, clarification and challenge:
The above changes shall be evaluated properly and in case of any issue identified the same shall
be clarified and challenged if necessary. None of the procedure or process mentioned should be
followed until unless the clarifications have been cleared and challenges have been met.
Closure:
The closure shall take place only after confirming to the changes proposed for the office. The
office should take a final decision whether to implement the changes or not.
Evaluation:
The above procedures shall be implemented and the necessary results obtained subsequent to the
implementation of the above steps shall be evaluated and the results shall also be documented for
future reference. Both positive and negative outcomes shall be documented to ensure that in the
final implementation the flaws are rectified if possible.
The learnings from the analysis are outlined below:
I. Importance of a standard recruitment policy for an office.
II. Necessity to define roles and responsibilities clearly amongst the employees clearly.
III. Importance of ensuring round the clock security at the location of cash box.
IV. Importance to record each and every single transaction involving cash.
V. Importance of documentation (Schjerling, 2018).

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References:
Cowan, D. (2018). External pressure for internal information security controls. Computer Fraud
& Security, 2013(13), pp.8-11.
Duffin, C. (2017). Recruitment code ‘ignores private sector exploitation’. Nursing Standard,
23(9), pp.5-5.
Dwivedula, R. (2019). Human Resource Management in Project Management: Ideas at the
Cusp. European Project Management Journal, 9(1), pp.34-41.
Ilic-Pupovac, M. and Vlaovic-Begovic, S. (2017). The importance of internal controls in profit
centers. Skola biznisa, 3(3), pp.60-67.
Law, P. (2018). Internal Controls and Knowledge Reengineering in Organization: Hong Kong
Evidence. International Journal of Financial Research, 7(4), pp.12-35.
Recruitment crisis. (2018). Nursing Standard, 3(3), pp.15-15.
Schjerling, P. (2018). The Importance of Internal Controls in mRNA Quantification. Journal of
Applied Physiology, 99(11), pp.401-402.
Shtub, A. (2016). Project segmentation—a tool for project management. International Journal of
Project Management, 21(6), pp.15-19.