Sunshine Center Case Summary
(1).
The primary problem at the Sunshine Center is that Reverent Andrew appointed someone with no basic knowledge on how to manage the daily financial operation. That is why there are no financial reports and/or summaries of the cash flows. Barb has no clue on how to balance the center’s budget and didn't keep track of bank reports and transactions; as a result, it was not clear where all the money went. (2).
There are 5 components in the COSO Framework: Risk assessment, Control environment, Control activities, Information & communication, and lastly, Monitoring. Those 5 components will help a firm achieve its objectives. Every company whether it’s big or small needs internal control in order to achieve, 1-Reliable Financial Reporting, …show more content…
In this case study all three can be applied. Let’s tackle the first element pressure. Barb is a mother of four kids maybe she has financial strains that itself is a powerful motive for Barb to commit fraud in order to make ends meet. The second element is the opportunity that presents in front of her in the form of “No oversight” on her bank transactions and unsupervised daily spending. And the third is the rationalization that there was never any accountability before, she thought she could still get away with fraudulent activities without the possibility of ever getting caught.
(7)
Perhaps she committed fraudulent financial reporting for deliberate misstatement and/or omission of financial accounting information with the intention to mislead the committee.
It is still possible that Barb is not an unethical person but simply a bad manager.
There was an instance where she claimed that she owed $1,000 at the local grocery store and Sarah and Olivia went to the food market to investigate. And as it turned out, there was an outstanding bill that had been $1,500 earlier. That is why the benefit of the doubt should be applied to her. Also, Barb has no training what so ever on how to create financial report and she was not asking to keep track of financial information.
The primary problem at the Sunshine Center is that Reverent Andrew appointed someone with no basic knowledge on how to manage the daily financial operation. That is why there are no financial reports and/or summaries of the cash flows. Barb has no clue on how to balance the center’s budget and didn't keep track of bank reports and transactions; as a result, it was not clear where all the money went. (2).
There are 5 components in the COSO Framework: Risk assessment, Control environment, Control activities, Information & communication, and lastly, Monitoring. Those 5 components will help a firm achieve its objectives. Every company whether it’s big or small needs internal control in order to achieve, 1-Reliable Financial Reporting, …show more content…
In this case study all three can be applied. Let’s tackle the first element pressure. Barb is a mother of four kids maybe she has financial strains that itself is a powerful motive for Barb to commit fraud in order to make ends meet. The second element is the opportunity that presents in front of her in the form of “No oversight” on her bank transactions and unsupervised daily spending. And the third is the rationalization that there was never any accountability before, she thought she could still get away with fraudulent activities without the possibility of ever getting caught.
(7)
Perhaps she committed fraudulent financial reporting for deliberate misstatement and/or omission of financial accounting information with the intention to mislead the committee.
It is still possible that Barb is not an unethical person but simply a bad manager.
There was an instance where she claimed that she owed $1,000 at the local grocery store and Sarah and Olivia went to the food market to investigate. And as it turned out, there was an outstanding bill that had been $1,500 earlier. That is why the benefit of the doubt should be applied to her. Also, Barb has no training what so ever on how to create financial report and she was not asking to keep track of financial information.