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Prizevoit Case

Satisfactory Essays
MEMORANDUM
From 2008-2011, Gale Prizevoits, former director of cash and investments at BSU, invested $13.1 million of the university’s unrestricted assets in fraudulent investments. Prizevoits was hired in 2007. Shortly thereafter, she foiled the university’s internal controls and began investing the university’s assets in new and untested investment plans without the university’s knowledge. The general consensus is that Prizevoits did not commit this fraud in order to make a profit, but simply to prove that the university should be more aggressive in their investing strategy. It was soon discovered that these investments were fraudulent and the perpetrators were using the money to fund their luxurious life and hobbies.
As soon as the issue was discovered, Prizevoits was fired and the university began investigating and reevaluating their internal controls. Prizevoits purposefully bypassed and navigated around the few internal controls BSU had in place to keep her
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internal controls are controls or safeguards that a business puts into practice to assure that fraud and crime won’t take place within their business. examples of internal controls are having management confirm transactions, or having login code for individual employees who access important data. No internal controls plan is flawless and the bigger their are the more expensive and time consuming they are. But, internal controls are vital for the success of a business; they should be tested and improved regularly.
In the case of BSU’s fraud, a feat to this severity should never have occurred, There are several internal controls that can help a business or entity avoid this kind of fraud. Once this fraud case was discovered, BSU implemented several new internal controls. These internal controls include 1) requiring a direct report from the
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