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The senior and staff on an audit getting it on in the copy room shortly after the client installed security cameras in said copy room. That was the craziest meeting I have ever had to witness between a client and a Firm. It should be noted I received an early promotion to senior after the current senior got fired. NO, I wasn’t the staff in question in this situation. Sometimes it’s what you know, not who you know. Sometimes it’s what you know they don’t want you to talk about.
Exhibit A - I once had a controller insist that the invoices I asked for (audit) were too hard to find and tried to hand me ones he thought were better. Same guy would lick his whole hand to turn pages, and would literally pick at scabs on his head until they bled while he was talking to me. Exhibit B - During the 2008 recession, the business office manager at one of my clients started using the company credit card to take 10+ family members out to dinner and used it to adopt a dog. Apparently, her husband had lost his job in the recession, and she couldn't cope. But they had pretty good internal controls, not sure how she thought she'd get away with it.
A FA director was caught forging invoices to submit on her expense report and submitting payments to fake vendors linked to her PayPal. She had already been previously blacklisted by the FDIC for bank fraud but no background check was done. When she was arrested, she had a loaded fire arm, and was a convicted felon.
I had a client whose debits and credits weren’t the same
Somebody was able to change their pay from yearly to bi-weekly. I'm not sure how long they got away with it. Eventually got arrested I believe.
I was auditing a city, and we were reviewing credit card GLs. The city manager was finding receipts at gas pumps and other places, turned them in to the AP dept to be reimbursed (the last 4 digits on the receipts were different and the name on the receipts was not his). He said he paid using his personal credit card and needed to be reimbursed. He was getting away with that, so he purchased a painting for thousands of dollars on the city credit card, turned the receipt in saying he paid for it with personal credit card, and got reimbursed. Then right before he got fired, he put the painting in his trunk and stole it. That was a memorable audit.
Wild
On BOD Audit Committee for a small federal credit union. Every BOD meeting, the credit union executive was so generous with “door prize” items that I became suspicious. Investigation revealed over $1 million embezzled through “loans” to family members and friends.
A CPA that couldn't do a bank recs, had to write deppsit and withdrawal on the bank statement. Didn't understand a property tax invoice. Didn't care about processes that had been set up prior to their arrival? Or the importance of dates in accounting! Didn't notice bank fraud in one account. Phones the bank to ask what the withdrawals from our account every week were instead of asking AP or opening Sage banking. They were a vendor!!! Calleda vendor and went through the bank on line, naming off large amounts of withdrawals, asking if any of them were theirs duh
Days before the filing, the controller did an on-top entry in their financial statement preparation workbook that hit and cleared out multiple other revenue accounts in order to fix a miscalculation that overstated depreciation expense. They truly just thought this was the best solution to keep the income statement balanced. When we (the auditors) called them about it, first thing the controller said was, “Don’t laugh at me.”
Did a walkthrough and there was a credit card with ACCOUNTS PAYABLE as the name on the card just laying out in the open.
Staff thinking they know everything
Huh?
Worked in the accounting department in a medium size company and assistant controller was sending invoices every month from his wife's LLC, he was approving it and paid it on the company's behalf. Yes, controls didn't exist. He was doing that for a few years till he got caught.
Same company: one night dispatch department received an unexpected shipment: a box full of weed. Apparently, regular dispatch guy got very sick and didn't show up at work.... It was his shipment, and yes it was not a first time he did it....
I worked at a company for 3 years and my entire department wasn’t getting a raise so when we asked for a raise finally the controller said “don’t worry about it, money comes later in life”. We all wound up quitting within the next 6 months.
I'm in Advisory, but a JIRA ticket that China attempted a nation-state attack on the bank I was consulting for.
While auditing payroll for a Company in Houston, ICE conducted a raid. The plant manager, office manager, and company owner had used terminated employee records to help undocumented workers obtain documentation by way of a local flea market. They would provide individuals with a social security number and name. Those individuals would go to a flea market and buy a Texas ID and Social Security Card and then get hired. There is no verification and the I9 allowed for an easy way out. The IRS didn’t care because the real owner of the social security number was on the hook. I guess the final straw was when they used Social’s of those who were collecting state benefits causing people to lose their state aid. ICE raided, rounded up the employees, cut a deal with the company owner who paid a huge fine and a week later those undocumented workers were hired back under new names and numbers. My Auditing leader asked him why he didn’t hire legal workers and he said that he could, but not for the money he could pay illegal workers and they don’t talk to OSHA or the EPA. He told us that ICE raided him before and he simply calls his lawyer and they work out a deal to pay a fine. I was shocked by his attitude.
I was a manager in tax on a construction company client. One day, the IRS showed up at their office. Basically said, “you owe us $1 million. Vacate the premises; this is ours now.” Turns out the controller was embezzling using payroll taxes to cover it. (One can essentially “kite” it.) He fled town. Story develops. He needs the money to fund his mistresses beauty parlor, furs, cars, etc. His wife wasn’t happy to learn that.
He wasn’t the only construction controller I worked with that embezzled payroll tax.