A Case Study : Rita Crundwell

1161 Words Sep 17th, 2015 5 Pages
Desiree Mauriello
Professor Cunningham
17, September 2015
A Case Study: Rita Crundwell
The case of Rita Crundwell revolves around a town, other employees, and an auditor 's blind trust in a women, who clearly did not deserve the trust. Crundwell was the town Comptroller. The fraud resulted in 53 million dollars to be siphoned from the town 's funds in a time frame of 20 years. Crundwell covered her tracks with a fake bank account, fake invoices, and the party line of blaming the state for simply being behind on payments. There were many red flags during the two decades of this scheme, but due to the town 's small size and trusting attitude, they relied heavily on external audits, which were not up to par.
Manager’s Assertions Management is required to make assertions about the transactions and events reflected in the financial statements, the account balances at the end of the period, and the financial statement presentation and disclosures. These three items are referred to as ASB assertions. For each of these three assertions, five areas should be examined: existence/occurrence, rights and obligations, completeness, valuation/allocation, and presentation and disclosure. These are referred to as the PCAOB assertions. All three of the ASB assertions were relevant to the town’s business of governing and providing services to the public. The transactions and events reflected in the financial statements lacked in existence and occurrence. Purchase invoices were…

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