Professor Elam

Thursday Apirl 19, 2012

Do you know Rita Crundwell?  I didn't either until today but she is going go make the Rogues Gallery of Who Do you Trust in small town America. I find these things fascinating because I once had a serious fiduciary position with a small county. 

Students are aware that I regularly preach that Internal Auditing is the fastest growing field in accounting. This is a case in point. Rita as the comptroller for a town with a budget of a mere $4.2 M. Yet she has apparently embezzled millions, a great deal since just 2006.

This case fits all the classic internal audit questionnaire stats. She was discovered when she took a leave and someone else checked the books. Rule-enforce mandatory vacations. 

She lived an extravagant lifestyle far beyond her means. The town really believed she made money in the horse business?  Nobody makes money in the horse business, except perhaps the stable and feed store. Rule-observe lifestyles. 

Everyone trusted her.  Rule-it's always an inside job. As I explained to one student in my office this semester, they are called con men (and women) because they get your confidence. 

If any of my grad students are still looking for an audit failure or financial blow up, here is the latest.