Case Study#1 WALITAN CONSTRUCTION COMPANY
Ashley Wesley is the assistant controller at the WalitinConstruction Company. Walitin is headquartered in Miami, Florida,and has a general contractorâs license in 30 differÂent states. Itis a privately held company with about 5,000 stockholders, with themajority of the stock being owned by the Walitin family.
Roberta Walitin has been the CEO of Walitin Construction for theprevious 12 years. Everyone considers her an excellent leader withexcellent business skills. She has an undergraduate degree from theUniversity of Illinois in engineering and an MBA from the sameschool with a concentration in accounting.
Roberta has always insisted on ethical business practices, sotwo years ago she worked
with Ashley to set up an ethics hotline, which Ashley personallymanages on a daily
basis. Anyone either inside or outside of the company can submittips anonymously by e-mail, telephone, or a special Web page shehad set up. There is a prominent link to the hotline on the homepage of the companyâs Web site.
Since Ashley set up the hotline, she has received three tips,all via the Web. In every case, the tip was about a subcontractoroverbilling the company for services renÂdered. In two of thecases, she was unable to confirm or disconfirm whether there wasfraud, mainly because it is almost impossible to investigate thework of a subÂcontractor on a job that has already been completed.But in the other case, she caught a roofer billing for fictitiouswork. She did not report the fraud to authorities, but Roberta didimmediately replace the subcontractor with another roofing company.Ashley reports to Bob Benson, Walitinâs controller. Heâs been withthe company for many years and works very closely with Roberta. Hismain interest seems to be producing the financial statements andworking with her to obtain new clients. Roberta and Bob spend largeperiods of their time going to lunches with clients, participatingin civic meetings, and helping in small community-serviceconstrucÂtion projects.
Because Bob is busy so much of the time with outside activities,Ashley pretty much runs everything in accounting on her own exceptfor the software and hardware, which Bob manages in conjunctionwith the head of the IT department.
Bob is not interested in details, and anytime Ashley tries toexplain something to him, he simply waves a hand and says, âDonâtworry me with operational issues. Just take care of it.â Ashley haslearned to live with his hands-off approach.
Overall, Ashley runs everything smoothly. Her main problem isthat Betty Grabber, the senior accountant reporting to her, wantsAshleyâs job. To make things worse, Betty is a niece of RobertaWalitinâs husband.
Betty is a very wily person. Her goal is to have Ashley fired,and sheâs been using her family connections to get the message toRoberta that Ashley is scheming to have Bob Benson, the controller,fired. Ashley also suspects that Betty has been spreading a rumorthat sheâs planning to go to work for a competitor if she is notsuccessful in takÂing over Bobâs job.
Ashley is unsure as to whether Bob is aware of the rumors. Heseems to be avoiding her recently, and there seems to an edge inhis usually friendly voice. Ashley is feeling depressed justthinking about it. Sheâs heard that Bob is having serious maritalprobÂlems. Perhaps those problems are affecting the way heacts.
This morning Ashley had a major surprise when she startedreading her e-mail, which contained a new anonymous tip. Someonehad submitted it last night via the Web, and it had automaticallybeen forwarded to her via e-mail. The tip read as follows:
To: Walitin Tip System
From: http://[email protected]
Sent: Tuesday 8/1/2015
Ms.Wesley,
Iâm sending this tip to help you. I understand what you aregoing through. Youâre working for a liar and a thief. Bob Benson ishacking the accounting system to produce fraudulent financialstatements. Heâs doing it in such a way that youâll get the blame.Itâs going to be a big mess.
What should Ashley do? Should she tryto investigate? Should she report the tip to Roberta?
Evaluate Walitinâs hotline and make recommendations for itsimprovement.
Case Study#1 WALITAN CONSTRUCTION COMPANY
Ashley Wesley is the assistant controller at the WalitinConstruction Company. Walitin is headquartered in Miami, Florida,and has a general contractorâs license in 30 differÂent states. Itis a privately held company with about 5,000 stockholders, with themajority of the stock being owned by the Walitin family.
Roberta Walitin has been the CEO of Walitin Construction for theprevious 12 years. Everyone considers her an excellent leader withexcellent business skills. She has an undergraduate degree from theUniversity of Illinois in engineering and an MBA from the sameschool with a concentration in accounting.
Roberta has always insisted on ethical business practices, sotwo years ago she worked
with Ashley to set up an ethics hotline, which Ashley personallymanages on a daily
basis. Anyone either inside or outside of the company can submittips anonymously by e-mail, telephone, or a special Web page shehad set up. There is a prominent link to the hotline on the homepage of the companyâs Web site.
Since Ashley set up the hotline, she has received three tips,all via the Web. In every case, the tip was about a subcontractoroverbilling the company for services renÂdered. In two of thecases, she was unable to confirm or disconfirm whether there wasfraud, mainly because it is almost impossible to investigate thework of a subÂcontractor on a job that has already been completed.But in the other case, she caught a roofer billing for fictitiouswork. She did not report the fraud to authorities, but Roberta didimmediately replace the subcontractor with another roofing company.Ashley reports to Bob Benson, Walitinâs controller. Heâs been withthe company for many years and works very closely with Roberta. Hismain interest seems to be producing the financial statements andworking with her to obtain new clients. Roberta and Bob spend largeperiods of their time going to lunches with clients, participatingin civic meetings, and helping in small community-serviceconstrucÂtion projects.
Because Bob is busy so much of the time with outside activities,Ashley pretty much runs everything in accounting on her own exceptfor the software and hardware, which Bob manages in conjunctionwith the head of the IT department.
Bob is not interested in details, and anytime Ashley tries toexplain something to him, he simply waves a hand and says, âDonâtworry me with operational issues. Just take care of it.â Ashley haslearned to live with his hands-off approach.
Overall, Ashley runs everything smoothly. Her main problem isthat Betty Grabber, the senior accountant reporting to her, wantsAshleyâs job. To make things worse, Betty is a niece of RobertaWalitinâs husband.
Betty is a very wily person. Her goal is to have Ashley fired,and sheâs been using her family connections to get the message toRoberta that Ashley is scheming to have Bob Benson, the controller,fired. Ashley also suspects that Betty has been spreading a rumorthat sheâs planning to go to work for a competitor if she is notsuccessful in takÂing over Bobâs job.
Ashley is unsure as to whether Bob is aware of the rumors. Heseems to be avoiding her recently, and there seems to an edge inhis usually friendly voice. Ashley is feeling depressed justthinking about it. Sheâs heard that Bob is having serious maritalprobÂlems. Perhaps those problems are affecting the way heacts.
This morning Ashley had a major surprise when she startedreading her e-mail, which contained a new anonymous tip. Someonehad submitted it last night via the Web, and it had automaticallybeen forwarded to her via e-mail. The tip read as follows:
To: Walitin Tip System
From: http://[email protected]
Sent: Tuesday 8/1/2015
Ms.Wesley,
Iâm sending this tip to help you. I understand what you aregoing through. Youâre working for a liar and a thief. Bob Benson ishacking the accounting system to produce fraudulent financialstatements. Heâs doing it in such a way that youâll get the blame.Itâs going to be a big mess.
What should Ashley do? Should she tryto investigate? Should she report the tip to Roberta?
Evaluate Walitinâs hotline and make recommendations for itsimprovement.
