Koss Blames Grant Thornton
Koss Corp. has fired its auditor, Grant Thornton LLP, as an expanded internal investigation turned up new losses that now total $31 million, going back to 2005, the company said Monday.
[...]
“None of Grant Thornton’s audit reports of Koss Corp.‘s financial statements, including the ones for the past two fiscal years, contained an adverse opinion, a disclaimer of opinion, nor were they qualified or modified as to uncertainty, scope, or accounting principals,” Koss said in a news release.
[...]
In response, Grant Thornton rejected the suggestion that it was to blame. Late Monday, a spokesperson for Grant Thornton issued the following statement:
“The fraud was apparently conducted by a long-time, trusted senior financial executive who was hired and supervised by senior management. The company did not engage Grant Thornton LLP to conduct an audit or evaluation of internal controls over financial reporting. Establishing and maintaining effective internal control is management’s and the board’s responsibility.”
The one who really should get the heat from the investigation is the CEO/CFO/COO, Michael Koss. When you have that many acronyms in your title, it’s your responsibility to make sure your internal controls are working.
“When you have that many acronyms in your title, it’s your responsibility to make sure your internal controls are working. “
naw, when you have that many acronyms you are too rich to care so you hire others to do it so you can go golfing.
Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 1137 hrs
There’s only one person at fault here and that’s the thief who embezzled the money.
I see they confiscated her passport. Flight risk back to India?Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 1159 hrs
The confiscated her American passport, which is typical for this type of crime.
Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 1204 hrs
Because she’s a “Flight risk”?
Willing to steal, unwilling to pay for her crime?Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 1223 hrs
Mike Koss’ weakness was trusting a long time employee. He forgot the #1 rule on people who handle your money, always double check the books, drill down to the actural transaction receipts and count the actual inventory. The auditor should also do the same check and this audit co. missed the shortages for several audits.
The Kossactual shareholders and employees will be hurt by this theft.
Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 1319 hrs
The accountants have a fiduciary duty to make sure that the audits are accurate. they must shoulder some of the blame
Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 1450 hrs
Scott- Everyone who is charged with a similar crime has to surrender their passport.
Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 1529 hrs
How about the person who actually stole the $31 million?
But I agree Koss himself is to blame for placing too much trust in one employee, and not changing his auditors periodically. (frankly I think Grant Thornton has some share in this too - but who knows what info they were given??)
Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 1604 hrs
If Thornton was hired simply to do the financial and management books, they would have had access to all of the paperwork, including the original receipts and POs. What they wouldn’t have known, and had no reason to know, was if they were tied to any actual purchases. They would not have been responsible for inventory counts, or to check and see if contractors actually existed. As long as the account existed and the checks/POs were signed off by the proper individuals, there fiduciary responsibility ends.
That is different than if they were hired to do an audit, or an evaluation of internal controls, but that does not appear to be the case in this instance.
And yes, you should hire a different company to do you audit and control work from the one that preps your books….
Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 1827 hrs
Its not unreasonable to fire your auditor when they don’t detect a $31 million embezzlement. And this obviously doesn’t mean that they’re placing sole blame on them. C’mon folks…..
Posted by .(JavaScript must be enabled to view this email address) on January 05, 2010 at 2105 hrs
There is no way to cover your trail for $31Million in a firm this size. While Mr. Koss certainly deserves his share of the blame, Grant Thorton had to have just mailed in their audit. You can’t hide $31M in a firm that size, if anyone even looks at the books at all. They are pointing at inventory, and you can’t hide a full years worth of product on the inventory line.
I’m an accountant, and not a big fan of lawyers, but in this case I think that Grant Thorton should plan on opening their wallet pretty wide and deservedly so.
Posted by .(JavaScript must be enabled to view this email address) on January 06, 2010 at 1035 hrs
Scott- Everyone who is charged with a similar crime has to surrender their passport.
So they cannot flee the country…. Why is this so difficult to comprehend?
Posted by .(JavaScript must be enabled to view this email address) on January 06, 2010 at 1937 hrs
Doug, John refuses to answer because he has labeled me as racist. In an earlier thread I questioned whether Sujata Sachdeva was an American citizen, which would make it easier for her to return to her native homeland to escape justice, not realizing questioning anything of this sort now makes you a racist. John believes himself highly educated and anyone who would dare question his credentials, or dictates to be beneath contempt, and an affront to his status as an alleged Colonel (Ret. branch unknown) with 10 years in intelligence. Personally, I’ve dismissed him as pompous and suffering from CSID (cranial-sphincter insertion disorder).
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2010 at 0956 hrs
Actually Scott, what you said was where was her green card and why was Koss giving a job to a non-US Citizen. All because her skin is a little darker than yours and her name is not Smith. That is the comment that I and numerous other people criticized you for.
Anyone who is charged with a similar crime has their passport seized, because if you steal $31 million you certainly have the resources to flee.
FYI Scott, she is an American citizen, as is her husband, both born and raised in the US.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2010 at 1201 hrs
I never asked about a “green card” John, actually you questioned whether I had one. You jumped right into a conclusion as to what I was asking, even though I never mentioned her “skin color”, nor her name either. All of these things you did, and of course you’re going to get like minded people to jump on board your band wagon because it makes it so much easier to dismiss someone’s argument if they are perceived as being a racist, doesn’t it? Sorry if I’m not so easily dissuaded from pursuing what I feel is pertinent information.
Now that you’ve answered my question, which I’m sure you have the resources to ascertain having been in the “intelligence service”, and I will assume to be a true statement because I’m not so cynical as to believe you would lie to me just to CYA, I thank you for the information. But I will continue to monitor this story to see how it pans out and to see if your information is indeed accurate.
Stay well Colonel, the year is young and a lot is about to happen to keep you occupied. Don’t burn yourself out on the trivial.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2010 at 1323 hrs
Is she even an American citizen? Seems like an awful lot of non-citizens are holding positions of authority in “American” companies these days.
Posted by Scott(I-C) on December 26, 2009 at 1602 hrshttp://www.bootsandsabers.com/index.php/weblog/permalink/koss_gets_ripped_off/
Yep.
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2010 at 1418 hrs
OK,........show me where I asked the questions you’ve stated I asked? I haven’t denied I questioned her citizenship, just your assertion that to ask in itself makes me a racist. I’m at a loss to understand how questioning ones citizenship is racist. Is it racist to ask the same about the panty bomber, or any other criminal crossing our porous borders and committing crimes in this country? If her name were Svetlana Kruschev, Niles Covington Blublood, or Sven Kloopenstort I’d be asking the same question. Don’t we have enough criminals of our own where it isn’t necessary to import them? Geezzz, get a frikking clue John. Is this really that hard for you to understand?
Posted by .(JavaScript must be enabled to view this email address) on January 07, 2010 at 1435 hrs
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