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A small Company has a Book keeper doing their book...

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A small Company has a Book keeper doing their books for 10 years when it is discovered that she has stold over $400.000.00. She was a one time owner of the book keeping firm that the CPA firm that has done there Tax returns had bought. To the best knowledge of the company the CPA firm was looking over the tax returnes as the book keeper has used their office to do the returnes. The question is weather or not the CPA firm has any liability in the $400.00.00 loss?,Oh, I forgot to mention, the other owner of the bookeeping firm that was sold to the CPA had stayed on with the firm in question... She is the best friend of the the bookeeper who has stolen the 400K. All of the 400k has been gambled away and the bookeeper has no assets. The companies bookeeper and the CPA firms employee have been seen together several times at a casino with the bookeeper giving the CPA employee money to gamble. Numerous times.....,The CPA firm in question was not the one that found the Embezzlement it was the the Embezzeled Company.What kind of Standards and Ethices should be in place? There was never a Financial Statement Engagement Letter.My understanding is all CPA firms are required to be Bonded & have Insurance. Would not the Insurance come into play if no employee has the $400,000. What about the Tax problems? There would also be $400.000 that was never taxed? Big IRS problem? I also looked at the Civil RICO Act, would this ever come into play? The Embezzlement had been going since 2007. I would think a Jury would favor the harmed party if this was not setteled out of court.

 

Paper#3644 | Written in 18-Jul-2015

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