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Financial Statement Fraud Casebook: Baking the Ledgers and Cooking the Books by Joseph T. Wells

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Chapter 30

Sales Commission and Fraud Perpetration

A Case Study of financial statement fraud for higher sales commission

Tarek El S.M. El Meaddawy

Adam Berg was a 45-year old who had lived and worked as an American expatriate in Saudi Arabia for years. Adam graduated with a degree in commerce in the States and started a career in accounting. He was eventually enticed to Saudi Arabia with an offer to take over as the financial manager of a major branch of a refrigeration and air conditioning company called Zenda Company.

Adam was a talkative man and he always tried to convince people of his professionalism and responsibility. I believed this was due to a weakness in his experience and professionalism; he often spoke about himself as a solid asset for the company and how important his role was instead of proving these points through his work.

On my very first day at Zenda, where I was hired as the internal audit manager, I was warned about Adam. The previous internal audit manager said that Adam always tried to create problems during audits because he didn't want them to take place.

Adam's business cards indicated that he was a CPA but, after only a few interactions with him, I began to doubt his claim. I casually asked him about accounting standards and how he applied them in his work, and his answers gave me reasonable assurance that he could never have passed the CPA exam.

When I first met Adam, he tried to be nice to me and my audit team. He offered us his assistance during ...

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