Grand Teton Candy Company: Forensic Accounting Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Grand Teton Candy Company: Forensic Accounting Case Study Analysis

Introduction

Elsie is an outgoing woman that involved in her community under the conversation group in (1983), she founded the organization making candy with the name “Grand Teton Candy Company”which is located in the region of Idaho. She brings its company working procedure from her kitchen. She successfully gets achievements in this business because of her special skills in producing candies, fudge huckleberries taffies, and jams. After getting the investment from her husband John they both can move the business outside ofthe kitchen and present it with new facilities. After getting a huge contract from the Natural food Supermarketthe candy company needs to expand its business and they look for borrowing money.

But Elsie feels uncomfortable borrowing money from the bank to increase its debt, then John ones friend a retired accountant gives them a suggestion to go for a public offering and get money from the shareholders. However, before going for IPO the Candy Company needs to do an audit from a large accounting firm(Shehata, 2021). John hired GAA (Ginney Accounting Associates) to instruct and adviceabout the factors that expect in the first audit. For the appropriate results, GAA suggests the Candy Company to forensic accountants for investigating there any concerns that create problems for the organization. This investigation is based to collect information about employees and money and focused on the facts to come up with to identify the fraud that happened or may be chances to occur.

Statement of Conclusion

After a look over the deep analysis of all the financial records of the (Grand Teton Candy Company) and observing all the employee's working procedures, loyalty, and efforts towards the work. The overall forensic accounting is based to investigate the employees of Candy Company and get the result based on facts that there is any fraud occur or might be chances to occur. Forensic accounting is the procedure that considers a grouping of accounting and investigative techniques towards financial crimes like observing employees working, interviews, and their confession based on presenting facts(Ogunode, 2022).This procedure of accounting helps the Candy Company to identify the nature of financial crime and identify where the opportunity occursfor fraud.

Fraud in auditing is considered as misrepresentation of things intentionally related to financial information by the employees or the management(Mohammed, 2022). There are various frauds considered under auditing most of them occur intentionally because of presenting high profits, misplacements ofassets for low tax, and others are considered as errors in audit, which means mistakes and unintentional errors. The overall analysis of the working procedure of Candy Company all the patterns are considered to be good, all the employees work according to their assigned tasks and perform their jobs appropriately. All the procedures, which include purchasing, inventory, sales, payroll, accounts payable, accounts receiving,and sales, present a cross-check of other employees' work by their dependent department, and most of the money transactions are done under the observation and checking of both owners of the Candy Company.

In all these procedures there is chances or opportunity rise for fraud, but there is one pattern observed and investigated under forensic accounting that relates to travel arrangements. There is a chance and clear opportunity to rise after revising the policy by John because of the complaint of unnecessary steps include in travels by Darla and Brenda.

Information Related to Fraud Occurred

After looking over the deep investigation of different departments of the Candy Company, it presents an opportunity for fraud under the travel arrangements because after revising the policy employees are own responsible for all the travel arrangements, and at the end, they submit receipts of expenses. This presentation of procedure identifies the opportunity for fraud and this type of fraud is considered to be (Misappropriation of Cash), which means the wrongful interpretation or fraudulent application of cash(Umar, 2020). This fraud considers a making false entry in an account of travel expenses and presenting additional payments that were never made.

Perpetrators of Fraud

Fraud perpetrators consider the background of victims from the place they come from, which means that the person involved in the fraud is in their position or working inside the Candy Company. Perpetrators of fraud include two employees, which is “Darla and Brenda” because both of them can do visits and business trips. Darla is responsible for the purchasing department and assigns other responsibilities which meet different suppliers and works for the customer’s satisfaction, which required various visits and trips to observe and check the quality of ingredients. Brenda is responsible for the department of Accounts Payable and Accounts receivable from suppliers, customers, and other necessary cheque invoices, which include travel expenses........................

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