Wayne Manufacturing: A Teaching Case On The Detection Of Misappropriation Of Assets

Abstract

This paper is a teaching case intended for use in an undergraduate auditing or fraud examination course.  Students are introduced to Wayne Manufacturing, a medium-sized firm in the Midwestern U.S.A. that manufactures parts for companies such as General Motors (GM) and Ford.  Wayne Manufacturing has some conditions present that put it at risk for misappropriation of assets.  Since it is not infrequent that such misappropriations are concealed in the accounting records, these conditions also increase the risk of fraudulent financial reporting.  Section One presents the facts of the case.  Section Two presents decision-guiding questions for students to consider.  Section Three provides teaching notes.  Section Four provides a summary of the paper.