Case ID 030103
International Research Journal of Applied Finance
January, 2012
ISSN 2229 – 6891
Case Study Series
Big Training Corporation
An Instructional Case for Courses In
Forensic Accounting, Auditing, Fraud Examination and Cost Accounting
Page
1
Dr. Robert L. Hurt
Professor of Accounting
Accounting Department
California State Polytechnic University, Pomona
Pomona, California rlhurt@csupomona.edu Dr. Robert L. Hurt, California State Polytechnic University, Pomona, rlhurt@csupomona.edu
Case ID: 030103
International Research Journal of Applied Finance
January, 2012
ISSN 2229 – 6891
Case Study Series
Abstract
This case study discusses an actual case of attempted asset misappropriation in an organization focused on training and development activities. The names of the parties involved have been disguised; likewise, the dollar amounts. A department manager attempted to change employee work assignments and training opportunities offered to clients in an effort to maximize salaries earned by employees while potentially decreasing organizational profits significantly. Students have the opportunity to: (a) analyze the case through the lens of the Association of Certified
Fraud Examiners taxonomy of occupational fraud and abuse, (b) comment on the ethical issues raised by the case and (c) conduct a sensitivity analysis of costs, revenues and profits.
Case description
This case study involves a classic agency problem in organizations: a manager attempting to maximize personal income for employees at the expense of the organization’s overall profitability. Students would benefit from some background in cost-volume-profit analysis prior to using the case; they are also required to use the Association of Certified Fraud Examiners taxonomy of occupational fraud and abuse (www.acfe.com) and their code of ethics. Ethics codes of other accounting organizations (such as the Institute of Management Accountants) may also provide a useful analytical lens for the case.
Big Training
January, 2012
ISSN 2229 – 6891
Case Study Series
Big Training Corporation
An Instructional Case for Courses In
Forensic Accounting, Auditing, Fraud Examination and Cost Accounting
Page
1
Dr. Robert L. Hurt
Professor of Accounting
Accounting Department
California State Polytechnic University, Pomona
Pomona, California rlhurt@csupomona.edu Dr. Robert L. Hurt, California State Polytechnic University, Pomona, rlhurt@csupomona.edu
Case ID: 030103
International Research Journal of Applied Finance
January, 2012
ISSN 2229 – 6891
Case Study Series
Abstract
This case study discusses an actual case of attempted asset misappropriation in an organization focused on training and development activities. The names of the parties involved have been disguised; likewise, the dollar amounts. A department manager attempted to change employee work assignments and training opportunities offered to clients in an effort to maximize salaries earned by employees while potentially decreasing organizational profits significantly. Students have the opportunity to: (a) analyze the case through the lens of the Association of Certified
Fraud Examiners taxonomy of occupational fraud and abuse, (b) comment on the ethical issues raised by the case and (c) conduct a sensitivity analysis of costs, revenues and profits.
Case description
This case study involves a classic agency problem in organizations: a manager attempting to maximize personal income for employees at the expense of the organization’s overall profitability. Students would benefit from some background in cost-volume-profit analysis prior to using the case; they are also required to use the Association of Certified Fraud Examiners taxonomy of occupational fraud and abuse (www.acfe.com) and their code of ethics. Ethics codes of other accounting organizations (such as the Institute of Management Accountants) may also provide a useful analytical lens for the case.
Big Training