The term “fraud” is commonly used to describe the use of deception to deprive, disadvantage or cause loss to another person or party. This may include theft, misuse of funds or other resources, or more complex crimes such as false accounting and providing false information. This case study from Mountain State Sporting Goods is a great example of individuals acting on the opportunity to gain financial advantage by committing what they thought were harmless adjustments, but were actually fraud. In this case study, there are so many problems with this business and how it operates. We noticed several areas of concern before even seeing the financial statements and my concerns were confirmed upon further investigation. The fraud began when Mr. Workman took control of the entire business and placed himself as a bank signatory, which allowed him to issue checks. After that, he decided to hire his longtime friend and recent CPA, Mr. Hess, as a business accountant, who was there to help Mr. Workman with his personal and business finances. Mr. Hess had just started his new CPA practice when he was hired and was not well liked by everyone in the company. Sue Bryant actually says she thinks Mr. Hess saw JD's death as an opportunity. I believe he was well aware of Mr. Workman's fraud and even got in on the action by asking Mr. Workman to invest his company's profits in a condo instead of a down payment on another building. Anita said in her interviews that Mr. Hess took unclaimed items from his business and was therefore no better than Mr. Workman. Mr. Workman is required to and must comply with the AICPA Code of Conduct as a CPA. Mr Workman contravened section 101, which states that a member in practice must be ... middle of paper ... the company because he might not have a building for the lending business pawned from his father in the future. end of the lease term. Before Mr. Workman took the reins, the company was valued at $350,000 by a Certified Valuation Analyst (CVA), but after a few years under Mr. Workman's leadership, I am confident that the valuation of the business would be significantly lower due to numerous fraudulent transactions. Another aspect affected by Mr. Workman's fraud is the company's cash flow. After some calculations, I was able to determine that the variances actually correspond to retained earnings. This is usually because the accounts do not go together and the amounts are staggered. The company's reputation is unfortunately shattered after these fraud accounts were discovered, as no one will want to pawn their belongings with a company known for taking pawned items or giving you an unfair loan on your belongings..