ABSTRACT: Management and auditors face increased responsibilities to evaluate internal control and assess the risk of fraud. This case provides the opportunity to evaluate internal controls and the possibility of fraud in a very small not-for-profit child care center, a setting that is easy to understand. The first goal of the case is to identify internal control weaknesses by applying the COSO internal control framework in an environment that lacks many aspects of internal control. Interactions among the five components of the COSO framework provide the basis for analyzing internal control. The case requires students to consider possible misappropriation of funds using the fraud triangle. A secondary goal of the case is to introduce financial reporting for a not-for-profit organization as a means of accountability.
Sunshine Center: An Instructional Case Evaluating Internal Controls in a Small Organization
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Sandra K. Fleak, Keith E. Harrison, Laurie A. Turner; Sunshine Center: An Instructional Case Evaluating Internal Controls in a Small Organization. Issues in Accounting Education 1 November 2010; 25 (4): 709–720. doi: https://doi.org/10.2308/iace.2010.25.4.709
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