Embezzlement Essay Example

Embezzlement is the involvement of the misappropriation of funds or properties that are entrusted to a person or a group of people. These is considered to be a breach of the fiduciary responsibilities that are entrusted to a person hence constituting to be fraudulent. In this type of fraud, the embezzler has the permission to use the assets however they end up using them for the wrong purposes or for their own benefit. Embezzlement occurs both in small scale and large scale where misappropriation of funds occurs without the proper supervision of overseeing the transactional processes. On a larger scale, embezzlement is a collaboration of more than one person which all falls under the business frauds. Embezzlement may occur in all business settings, whether profit-making or non-profit making or government. All are risky to fraud occurrences of embezzlement.

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On the Dodger case, officials were charged with padding of salaries. These included the former payroll chief for allegedly conspiring with other employees towards adding extra money in their salaries through paying them for hours they had not worked for. Campos, the payroll officer, also added extra names of people that did not work in the company which included his girlfriend among other fictitious names. These are an indication that the system trusted Campos who had designed the payroll system however he did handle the payroll for Dodger players, he filled out all the payroll cards for the employees. From the case, the company acknowledged Campos with the system to the point of entrusting him with the system alone where they thought he was dedicated for in scenarios where he was away on vacation would come back to fill out the payroll.

The main weakness that is visible in these case is the entrusting of a non-employee towards the handling of payroll. The other weakness of the system is seen where total control is given to one man and was not entrusted to another person whereby even in cases where Mr.Campos was on vacation he would come back to fill out the payroll. This weakness is shown by the company later finding out that they were losing money when Mr.Campos fell ill, and Kenneth temporarily took over. The other major weakness is that Dodger company did not have a bookkeeper who could do internal auditing of the company also they did not hire an external auditor to conduct the same. These are shown by the number of years that the fraudulent activity took place, in case there was an internal audit conducted, the embezzlement would have discovered earlier enough.

The following policies, however, could have reduced the chances of embezzling from taking place if used well. Firstly the Dodger Company should have supervised their employees closely, on these case the payroll officer, if done properly the embezzlement would have been discovered earlier enough. The company should have used serially pre-numbered pay slips, through this they could have noted of any fishy occurrences on the pay slips.

In the second case, Woodruff Arts Centre claimed that a former employee set up a fake company that was paid by the nonprofit for over a period of five years. The man is said to be an administrator though not yet identified by the company he could request payments for services rendered by the company. Through his company, when invoices were being submitted, he would include his, and no questions were asked. It was surprising that the company paid for services for over five years without really knowing or questioning what they were paying for. The company in question was one of the thirteen vendors most regularly paid.

The following policies, however, could have proven effective if used to prevent the embezzlement fraud. The company should conduct internal audits on all of their functionalities. In these, they could know what money is given to who and for what purpose. Through these, the company could have known in advance the companies that were paid and for what purpose. Conduction of regular audits could serve as a way of keeping away fraudsters for they would be afraid to fall victims which is a crime chargeable in a court of law. The company should also thoroughly evaluate their organization's internal control systems. These are some of the functionalities that the company failed in which also serves as major weaknesses.

The third article talks of a former CFO that admitted to having embezzled funds to the FBI in her former working company Fagen Inc. on the case the CFO has embezzled over 4.5$ million from her former company. At her position, she would write checks and send them to a company that she owned and would later transfer the money to her bank account. These were later discovered by the accounting personnel who saw several suspicious transactions to a company that Fagen Inc. had no business dealings with. The main weakness that the company made was letting a senior official handle matters concerning the payment or release of funds from the company.

The following policies if set up by the company could prove futile when followed to the letter. The company should regularly conduct internal audit whereby tracking of who and why they are paid the amounts indicated. The company should also implement the policy of allocating one department that deals with payment of the services rendered by other companies, these will enable the department mandated for these responsibilities be responsible for everything that happens in the department.

Conclusion

The similarities that are seen in the three articles is that the companies did not conduct internal audits hence the embezzlement fraud took place for a longer time than expected. In one of the companies, the person mandated with the responsibility of company payment is entrusted to the point that even if he is on vacation, he still conducts the payroll. These are similar to the case on Woodruff where one of the employees would slip in the invoice of his company and be paid, and the company did not go through the invoices which they could have noticed that they were paying for services not rendered. These are a form of carelessness on all the parties involved hence internal controls should be implemented and adhered to.