ISSUES IN ACCOUNTING EDUCATION
Vol. 26, No. 3
2011
pp. 547–568

American Accounting Association
DOI: 10.2308/iace-50004

Koss Corporation Case: Trouble in Brew City
Brian Daugherty and Daniel G. Neely
ABSTRACT: This instructional case provides auditing students an opportunity to examine an interesting real-life embezzlement and financial statement fraud occurring at a publicly traded company in the post-Sarbanes-Oxley (SOX) era. The case focuses on independent auditors’ and senior management’s reporting responsibilities related to internal control over financial reporting involving smaller public companies (nonaccelerated filers). While all public companies are subject to external auditor and management attestation on the …show more content…

Despite a hectic international schedule, he has a relaxed style that calms all around him as he works out solutions to intriguing and complex problems.
His anthropology background has been cited in USA Today as the hot asset for corporate leadership in the business world. He has inspired public confidence in Koss Corporation, through his media appearances, including offering astute business analysis on CNBC television and by providing the contents of his shoulder bag—demonstrating the necessary tools of the modern executive—for editorial scrutiny on the business pages of the New York Times.
He has never relied on conventional solutions or routine answers, but rather has sought to invent himself over and over again, working outside the box to develop new solutions, markets, and concepts as needed. In gratitude for the leadership he has provided Beloit College as a member and chair of the Board of Trustees, as a valued advisor to the leadership of the College, and as an example to generations of graduates, the Beloit College Alumni Association is proud to confer upon Michael J. Koss its highest distinction, the Distinguished Service Citation.
Unlike many other companies, Koss remained profitable through the economic downturn of the late 2000s, reporting net income of $2.0 million and $4.5 million for the fiscal years ended June 30,
2009 and 2008, respectively, with retained earnings of $21.6 million at June 30, 2009 (SEC