This case discusses the potential consequences when small public companies are exempted from Sarbanes-Oxley Section 404(b) requirements for internal control audits. Students are presented with the real world case of Koss Corp., in which a large fraud was perpetrated over the course of five years by circumventing the company’s internal controls. This case is appropriate for use in an auditing or fraud/forensic class. Students will examine the various facets of fraud and its prevention and detection, including the role of the external auditor, as well as appreciate the importance of internal controls in small companies.


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