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Howard Street Jewelers - Case Study Example

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The first 10 years of work she spent trying to build confidence with the owners before she started stealing from them. The fraud might have been possible by two…
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Howard Street Jewelers
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"Howard Street Jewelers"

Download file to see previous pages This gave her a good chance of covering up her fraudulent actions. Many frauds of this nature are made possible by ignorance of owners when it comes to studying books of accounts and awarding of a lot of trust to employees which is dangerous.
The fraud was detected due to the receipts from the shop that showed high costs for such a small business. Studying of the account books by Alvin more often also allowed them to detect the fraud. The Levi’s should have paid attention to Betty’s lifestyle as it was changing inconcurently with her earnings. The increase in costs of operation for the shop should have also been a sufficient heads up.
The ratios of costs of operation and the size of the business are the ones that raised an alarm to the accountant. In addition, the shop was facing downward movement in terms of profits and earnings. The business was going downhill.
The cash shortages were not directly related to the fraud. The reason why businesses have cash shortages even if there is no theft of cash is because of the exaggerated receipts that show high operational costs.
The accountant does not bear any responsibility because he is an external accountant and doing an audit for a private business is not one of his legal duties. He is only expected to do it if contracted by the owners of the private business (Petrucelli ...Download file to see next pagesRead More
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