Accounting Fraud Detection and Deterrence Current Events Paper 1

The article is about occupational fraud, where the chief operating officer (COO) allegedly
embezzled an estimated $108,000 over 18 months (Wallack, 2018). Somerville
Homeless Coalition board member was reviewing profits made the previous year when he
realized that the COO had earned more than any other official at the organization, not even the
chief executive officer, which was unlikely (Wallack, 2018). Upon investigation, it was found
that the COO added some money to his paycheck for personal expenses. The charity dealt with
providing food and shelter for families.

The key issues raised in the article is how charity organizations are vulnerable to embezzlement
of funds (Wallack, 2018). Somerville Homeless Coalition is just an example. The reason is
mainly that these organizations are run by people who are passionate about their courses, and
who lack a background in finances. Thus, it is easy for someone to embezzle funds because there
is usually little or no accountability. The COO used the loophole to embezzle funds fr his
personal gain. He received $12,000 more than anyone else at the organization (Wallack, 2018).
The CEO was not up to the task and never picked up the abnormally. A board member realized
the fraudulent activity while going through the organization’s records.

The COO had the option of being faithful and accountable in his work. He failed to act with
integrity leading to a loss of more than $12,000 (Wallack, 2018). The money lost was enough to
prevent 100 families from being homeless (Wallack, 2018). The situation should be resolved by
having the COO take full responsibility for his actions, and this should include forfeiting his ill-
gotten gains. By so doing, more families will be able to receive food aid and shelter. Readers
should consider questions such as; “ what should have been done differently at the organization
to prevent the fraud?”, “should charity organizations star considering finance experts in their
staff teams?”

ACCOUNTING FRAUD DETECTION AND DETERRENCE 3

References

Wallack, T. (2018). Taking from charity: Employee theft ‘shockingly common’ at nonprofit
groups – The Boston Globe. BostonGlobe.com. Retrieved 28 August 2020, from
https://www3.bostonglobe.com/metro/2018/01/27/taking-from-charity-employee-theft-
shockingly-common-nonprofit-
groups/aGzL6qg5JnhkAsAbj7tMkO/story.html?arc404=true.