The alleged embezzlement from Koss Corp. may be far greater than was first apparent, with the company saying late Thursday that "unauthorized transactions" over the last four years could exceed $20 million.
The firm's longtime vice president of finance already stands accused of stealing $4.5 million from the small, publicly traded maker of stereo headphones over three months this fall and covering her tracks by falsifying balances in Koss' bank account.
Now, the company's continuing internal investigation indicates that the unauthorized transactions may extend as far back as fiscal 2006 and amount to more than $20 million. . .
. . . Koss said Thursday that its last four annual financial statements should no longer be relied upon, nor should its latest quarterly report. The firm said it would file restatements as its investigation warrants. . .
. . . The unauthorized transactions the firm now has discovered apparently went unnoticed in annual audits of the company's books. The Grant Thornton accounting firm conducted the last four annual audits and each time concluded that Koss Corp.'s financial statements fairly represented the firm's financial position. . .
Audits aren't infallible but you'd think a little thing like the embezzlement of $20 million would have been caught by a high and mighty firm like Grant Thornton. Alas, no. But I like to think a teeny tiny little firm like mine would have noticed something was afoot. That's a lot of personal credit card debt that's being paid off.
Looks like Koss'll be looking for a new auditing firm. Wonder if they'd like to hear from a teeny tiny little firm in Oklahoma?
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Koss would be well served by your firm, Peter.
ReplyDeleteAs it now stands, the total amount embezzled exceeds $31 million. Koss grossed about $38 million in 2008.
Blame the auditors for missing this whopper of an embezzlement, certainly, but someone needs to ask management if they were all sleeping.
You're right, management's the first line. I suspect they saw what they wanted to see or didn't see, on purpose, what was in front of them. Holy moly, that's a lot of money to be swept under the rug.
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