Something’s Fishy at Sy’s Fish

Margaret GarnseySiena College

2010 AIS Educator ConferenceEstes Park

Overview

Background

Purpose of the case

Classroom Discussion

Query Hints

Business Letter

Background

Sy’s Fish was originally developed as a modeling case using the REA ontology

Implementation and querying component was added to give students “hands on” experience

Coverage of internal controls has been expanded in many AIS courses

Purpose of the Case

Develop critical thinking skills by working on an unstructured problem

Further develop querying skills

Practice communication skills

Classroom Discussion

What is fraud?

Fraud Triangle

Fraud Categories

Fraud Opportunities

Fraud Definition

“The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the employing organization’s resources or assets”The Association of Certified

Fraud Examiners (ACFE) Report to the Nation on Occupational Fraud Abuse, 1999

The Problem

Organizations lose 5-6% of revenue annually due to internal fraud = $652 Billion in U.S. (2006)

Average scheme lasts 18 months, costs $159,000

25% of costs exceed $1M Smaller companies suffer

greater average $ losses than large companies

Internal Fraud Recovery

$0 RecoveredRecovery<=25%Substantial Recovery

How Fraud is DiscoveredHow Fraud is Discovered

05

10152025303540

Tip By Accident Internal Audit InternalControls

External Audit Notified byPolice

%

Some fraud is discovered via multiple reporting methodsTips come from Employee 64%, Anonymous 18%, Customer 11%, Vendor 7%

Fraud Triangle

Opportunity

Motivation/Pressure Rationalization

Is Sy’s Fish ripe for fraud?

Common Types of Fraud in a Company

Employee theft – involves diversion of assets by an employee for personal gain.

Employee-outsider theft – involves diversion of assets by an employee in collusion with an outsider for personal gain.

Management fraud – concerns diversion of assets or misrepresentation of assets by management.

Possible Fraud at Sy’s Fish

What types of fraud could be committed at Sy’s Fish?

For each type of fraud, what methods may help to prevent such fraud?

Hints to Students

Initial HintsCash received/paid to customers/suppliers

accurately represents amounts billedParse Data by Month: Month(NameOfField)

Later HintsLook at Gross Profit and its componentsExamine Employees

Files and Contact Information

http://lw.siena.edu/garnsey/AISeducator/2010_AIS_educator.htm

Paper

Student Database File

garnsey@siena.edu