Tonya Larsen is being investigated by law enforcement and Southern Appalachian Insurance...

Question

Tonya Larsen is being investigated by law enforcement and Southern Appalachian Insurance Company.
Just before closing on March 2, 2011, the branch manager of Bank of Lawrenceville called Jennifer Anderson, MD, the CEO of Anderson Internal Medicine, to inform her that the medical practice’s checking account was overdrawn by $347.19 and the bank had returned four checks totaling $6,159.75 ($1,534.73, $1,783.83, $1,341.19, and $1, XXXXXXXXXXDr. Anderson spoke with Tonya Larsen when she arrived the next morning.

David · Accepted Answer

QUESTION 1: 
What are the three elements of the alleged employee dishonesty loss? How much is the total 
verifiable loss from these elements? 
SOLUTION 1: 
The three elements of the alleged employee dishonesty loss is given as follows: 
1. Opportunity: Opportunity is the first and most significant element in triangle of employee 
dishonesty. An organization can effectively use to discourage employee dishonesty policies by 
way of policies, procedures and processes. Lack of internal controls creates an opportunity for 
crime. Example of lack of control can be no procedure for processing checks. In the given case, 
there was lack of internal control in doctor's clinic. Larsen was given access to all accounting and 
payroll systems which resulted in the fraud.  
2. Motivation: Motivation for a crime is the pressure for a crime and can arise from variety of 
sources. Generally, motivation is the greed. Example of this can be diverting donations of a 
company to pay personal bills. Larsen's hunger for greed caused her to use office ATM cards. 
3. Rationalization: Rationalization is defined as the attitude or thought process of dishonest 
individual and is also called as moral justification. Dishonest employees rationalize their crime 
with thoughts and usually make statements like: "I hate my manager" or "I am not stealing, I 
work hard and I deserve it." The thought process of Larsen was wrong as she was engaged in this 
activity previously as well in some other company.  
Total Verifiable Loss = $260 + $2,210 
Total Verifiable Loss = $2,470
QUESTION 2: 
What are the alleged frauds (e.g., disbursement, embezzlement, larceny, payroll, skimming, 
other)? Discuss. 
SOLUTION 2: 
Skimming:

Tonya Larsen is being investigated by law enforcement and Southern Appalachian Insurance Company. Just before closing on March 2, 2011, the branch manager of Bank of Lawrenceville called Jennifer...

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