The Accountant Did It

Posted by & filed under Accounting Principles, Advanced Accounting, All Articles, Auditing, Cost Accounting, Financial Accounting, Financial Reporting and Analysis, Financial Statement Analysis, Fraud Accounting, IFRS, Intermediate Accounting, International Accounting, Managerial Accounting, Uncategorized.

A 43-year-old CPA who volunteered to do the books for the Libertyville Boys Club turned himself in after $66,700 of the not-for profit group’s youth football program funds were missing. Jacobsen had been volunteering his services to the club since February 2009 as the treasurer of the club based at Butler Lake Park, Illinois. Libertyville police said Jacobsen had exclusive power to collect monies and pay bills related to the programs. In March, board members became suspicious after Jacobsen refused to bring the financial records to monthly meetings. He finally did so in October.

Questions:
1. What basic premise of internal controls was violated?
2. Why do you think that not-for-profit organizations are so susceptible to frauds like this one?
3. Suggest two or three ways that the Club could have prevented this event.

Source:
News-Sun Staff. (2011). Accountant Accused of Stealing From Libertyville Boys Club. January 8 (Retrievable online at http://newssun.suntimes.com/news/3207508-418/libertyville-club-jacobsen-police-66700.html)