Scenario

Neeraj runs a respectable coffee shop in a small Pacific Northwest town. His friend, Janet, has been working for Neeraj on a part-time basis and always helps him close up shop. At the end of each day, Janet takes the cash and checks from the day’s business and deposits them in the bank’s night deposit, which is basically a secured metal drawer in the wall of the bank.

Business is good, but Neeraj is always struggling to pay the bills. In addition, the IRS contacted him asking about past-due payroll and income taxes. Neeraj was half-joking with his friend Rebeca, a fellow small business owner, about how he doesn’t understand money and finances, but makes a darn good cup of coffee and is good with people. Rebeca suggested that it might be time for Neeraj to bring in an expert.

Despite the cost, Neeraj hired a CPA to help him with the taxes. The CPA noticed a discrepancy in the cash account, which led to the hiring of a forensic accountant who discovered that for 18 months, Janet had been skimming the cash from the deposits, changing the deposit slips, and then making the smaller deposit into the bank account. The forensic accountant determined that Janet had skimmed $42,828.96.

Discussion Questions

Discuss among your peers and come up with the best answers:

  • How do you think Neeraj could have prevented this?
  • Pretend that Neeraj hired you as his accountant in the beginning, what would you have established to prevent this scenario?
  • Discuss the role of accounting in preventing these types of scenarios.