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Hello, I am looking for someone to write an article on The Internal Control System of Clive Peeters in Light of the Embezzlement Case. It needs to be at least 3250 words.
Hello, I am looking for someone to write an article on The Internal Control System of Clive Peeters in Light of the Embezzlement Case. It needs to be at least 3250 words. Background Facts
Clive Peeters Ltd announced on August 11, 2009, that it had discovered accounting discrepancies in its payroll accounts which showed that a staff member (Payroll Officer Sonya Causer) had transferred cash out of the business to her bank accounts and the bank accounts of related parties. and that the funds were used to buy and sell real estate. The total misappropriated cash was $19.366 million. The misappropriations were accomplished through the falsification of entries in the company's payroll accounts. The company also announced that it was seeking recovery of real estate and other assets, with regard to which Ms. Causer and related parties were cooperating, and that the Victorian Supreme Court had ordered the transfer of the said assets to the company and the freezing of the bank accounts of the offenders.
The missing total cash included $818 thousand misappropriated in July 2009. This amount was to be reflected in the ensuing fiscal period ending June 2010. The recoverable amount for 2009 was to exceed $16.366 million after deducting mortgage and transaction costs because of the expected loss on the sale of the properties in the sum of $3 million. On top of that, the legal, investigation and other costs were estimated to amount to $1.815 million, for a total cash outflow of $4.815 million. For the said fiscal year ending June 2009 the total misappropriated cash was $18.548 million, which means that after deducting the relevant cash outflows, the net proceeds from the recovery could be $13.733 million.
Despite the accounting discrepancies, the company reported that the " view expressed by the Managing Director and the Chief Financial Officer is that these misappropriations occurred despite the sound system of risk management and internal controls that existed within the business which was operating efficiently and effectively in all material respects in relation to usual and foreseeable financial reporting risks.
The financial impact of the misappropriations
During the period in which cash misappropriations were being committed prior to, during, and after FY 2009, the company was steadily experiencing cash problems that affected its trading performance beginning in the fourth quarter of 2008.
